UK Accounting Glossary
The book-to-bill ratio measures the relationship between orders received and the amount of product shipped and billed. The book-to-bill ratio is widely published for the semiconductor equipment industry, and it is an important indicator of the health of the personal computer industry and the overall technology sector as well. A book-to-bill ratio of above 1 indicates that more orders were received than filled, and hence a strong market where demand outpaces supply. Similarly, a book-to-bill ratio of below 1 points to weaker demand. The book-to-bill ratio for semiconductor equipment makers headquartered in North America is released around the 20th of each month by the Semiconductor Equipment and Materials Institute (SEMI) based on average bookings and billings for the previous three months. The Semiconductor Equipment Association of Japan issues a similar book-to-bill ratio for makers in Japan. VLSI Research publishes a book-to-bill ratio for worldwide demand; unlike the SEMI book-to-bill ratio, however, it is based on figures for one month.
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This glossary post was last updated: 4th February 2020.