For the first time in more than a year, the monthly book-to-bill ratio for semiconductor-equipment companies reached 1.0, indicating that chip manufacturers are buying equipment as fast as their suppliers are producing it. According to a report by the Semiconductor Equipment and Materials International, North American suppliers of equipment used to manufacture semiconductor chips had about $870 million in October worldwide bookings and an identical amount in worldwide sales. The three-month average of worldwide bookings in October 2003 was $871.1 million, a 12% rise over September. The three-month average of worldwide billings in October 2003 was $873.4 million, an 8% rise over September. Bookings rose 12% from $775 million in October 2002, but billings decreased 13% from $1 billion in the year-ago period. The book-to-bill ratio gives a snapshot of supply and demand. When the ratio is above 1.0, it indicates that demand exceeds supply. For the past 14 months, the measure has been below 1.0, indicating excess supply. The last time it was above 1.0 was August 2002 and reached a low of 078 in October of 2002. Semiconductor-equipment manufacturers Applied Materials ( AMAT - Get Report), ASML Holding ( ASML - Get Report), Axcelis Technologies ( ACLS), and MKS Instruments ( MKSI - Get Report) are among sector companies favored by CIBC analysts, who note that these companies are already richly valued. For the year, Applied Materials' stock is up 68%, vs. 97% for ASML, 84% for Axcelis, and 58% for MKS. Axcelis trades at a price-to-earnings ratio of 33 times expected 2004 earnings versus mid 40's 2004 PE valuations for the others.