For the first time since last November, sequential orders of semiconductor equipment dropped in July. Orders of chip equipment amounted to $1.15 billion in July 2002, a decline of 2% from revised June levels, according to Semiconductor Equipment and Materials International, a trade group. The book-to-bill ratio also fell to 1.16 from the prior month's 1.26. That means that $116 worth of new orders were received for every $100 of product billed for the month. Most analysts had expected a drop-off in demand, in light of bearish business trends. In fact, the book-to-bill ratio already had dropped sequentially in June, according to revised numbers. "The July bookings data likely reflects renewed questions about the robustness of the economic recovery and the prospects for the consumption of electronic goods," said Dan Tracy, director of industry research and statistics for SEMI. "The data is consistent with recent announcements of reduced capital spending plans by some global chipmakers and supports the consensus of industry analysts projecting market recovery in 2003." In a research note out today, Banc of America analyst Mark Fitzgerald predicted the ratio will continue to drop for the next six months as the pace of bookings stalls. "We are concerned that follow-on investments from Taiwan will not materialize in the second half of 2002," he wrote, noting that Taiwan has accounted for 35% of the industry's business in the first half of the year. Leading foundries Taiwan Semiconductor ( TSM - Get Report) and United Microelectronics ( UMC - Get Report) have said they're cutting capital expenditures for the remainder of the year.