Semis Jump on Record Book-to-Bill Report
By Cindy Christ

Semiconductor shares were on the move Tuesday on news of record equipment orders for November.

North-American semiconductor equipment manufacturers posted solid sales gains last month, recording a book-to-bill ratio of 1.10, according to the Semiconductor Equipment and Materials International (SEMI).

The SEMI book-to-bill ratio compares the three-month moving average of bookings to the three-month moving average of shipments for North American semiconductor equipment makers.

A book-to-bill ratio of 1.10 means $110 in orders were received for each $100 worth of products shipped.

For November, the three-month average of worldwide shipments hit $1.55 billion, up 4 percent over October and 69 percent from the same period last year.

The three-month average of bookings for the month was $1.7 billion, a 6 percent increase from October and 122% rise from November 1998.

In terms of dollars, the bookings figure is the highest recorded to date, four percent above the previous high of $1.63 billion in November 1997 and just above the previous record high of $1.69 billion posted in February 1996.

"Semiconductor manufacturing equipment bookings posted an all-time monthly high in November," said SEMI president Stanley Myers in a statement. "The growth pattern in semiconductor sales and the increasing adoption of new technologies has helped drive continued strength in the equipment market."

In a research note to clients, Credit Suisse First Boston estimated chip demand would grow 15 to 20 percent in 1999 and 25 percent in 2000, according to Reuters.

Shares in semiconductor companies moved up across the board, lifting the Philadelphia Semiconductor Index ($SOX) 3.5 percent intraday.

Dominant player Applied Materials (AMAT) gained $.7.31, or 6.3 percent, to $123.63.

After announcing last week it would beat fourth-quarter profit estimates and issue a 3-for-1 stock split, Novellus Systems (NVLS) rose $4.19, or almost 4 percent, to $117.75 after trading as high as $128.38.

The NVLS split takes effect Jan. 15 for shareholders of record on Dec. 30.

Leading semiconductor testing equipment maker Teradyne (TER) rose $7.25, or 13.7 percent, to $60.25.

KLA Tencor (KLAC), which makes tools that locate defects on computer chips during manufacturing, moved up $7.19, or 7.1 percent, to $107.88. KLAC announced a 2-for-1 stock split Friday for shareholders on Jan. 4. The split takes effect on or around Jan. 18.

Semiconductor materials developer Cree Research (CREE) ran up $6.13, or 8.8 percent, to $75.88, after reporting it would expand its manufacturing capacity for producing light emitting diodes (LED).

LEDs are used in cellular handsets, automotive instruments, indoor and outdoor signage, indicator lighting, and other consumer products.

Intraday, Motorola (MOT) posted a new 52-week high of $145.25 after J.P. Morgan upgraded its price target to $165 from $120. Shares closed up $3.83, or 2.9 percent, at $138.50.

Industry bellwether Intel (INTC) rose $1.81, or 2.2 percent, to $82.88.