The Semiconductor IndustryAssociation is expected to report the sixth straight increase
in its three-month average book-to-bill ratio, reflecting a
continued modest recovery in the computer chip industry,
semiconductor analysts said.
    Semiconductor analysts contacted by Reuters put the March
book-to-bill -- which is the ratio of new orders to actual
sales -- at around 1.15, up from a preliminary 1.13 in the
three months ended in February. The association is expected to
release its estimates later today or on friday.
    The analysts said they expect strong March performance both
in new orders and actual sales.
    Michael Gumport, analyst with Drexel Burnham Lambert Inc,
projected the three-month average of new computer chip orders
at about 835 mln dlrs, up from 788 mln dlrs in February.
    He put three-month average sales at about 720 mln dlrs,
also an increase from the 700 mln dlrs reported last month.
    Gumport said average new orders over 850 mln dlrs would be
a plus for semiconductor industry stocks, while orders under
800 would be interpreted negatively on Wall Street.
    Gumport said cut backs in Japanese computer chip production
are aiding U.S. chip maker orders and sales.
    Edward White, analyst with E.F. Hutton Group Inc, said
while Japanese cut backs may be a small factor, their effect
should be more readily apparant in April and May.
    White, who put the March book-to-bill ratio at 1.15-1.16,
said the ratio might hit 1.20 later this spring, before showing
a normal seasonal decline during the summer.
    He forecast three-month average orders at 825 mln dlrs for
March, with three-month average billings at about 711 mln dlrs.
    "This says the industry is still in a phase of moderate
recovery...it is not dramatic yet," said White.
    He said the industry still has not seen a pick-up in high
technology capital spending needed to create a strong recovery.
    He said a boost in spending on such big-ticket items as
mainframe computers would enhance the recovery, which is now
focused on personal and small business computers.
    Kidder Peabody and Co analyst Michael Kubiak agreed the
industry is showing a recovery trend, that while encouraging,
is not dramatic.
    Kubiak projected the March book-to-bill ratio at 1.14. He
said the three-month average for orders will be up about 4.5
pct from last month, while shipments rise about one pct.
    He noted, however, orders during the month of March alone,
a statistic the Semiconductor Industry Association does not
publish, should show a 15-20 pct rise from February orders.
    Kubiak said a book to bill ratio of 1.14 would have little
or no effect on semincondutor industry stocks, while a ratio of
1.13 would be negative for the market and a ratio of 1.16 would
likely cause the stocks to rise.
 Reuter
