Orders for semiconductor equipment fell so sharply and to such a low level in April that the month had to have represented the bottom -- or very close to it -- for new equipment demand.

At least that's what some on Wall Street are saying Wednesday after the

Semiconductor Equipment and Materials International

reported Tuesday that the book-to-bill ratio fell to 0.42 in April. The ratio shows that $42 in new orders were received for every $100 of products shipped in the month.

That's the lowest ratio since the SEMI began tracking the industry's book-to-bill ratio in 1991. And the April numbers, which showed orders falling 41% to $711.8 million from March's $1.2 billion, are far below what most analysts had expected. They were even worse than the

latest earnings report from industry giant

Applied Materials

(AMAT) - Get Report

would have indicated. Orders, or bookings, are important because they're the precursor to revenue growth. And since revenue has been declining, investors are anxious for any indication that it'll turn up.

So far Wednesday, investors are taking a cautious stance. Chip equipment stocks are off only slightly in recent trading. Applied Materials has slipped $2.17, or 3.8%, to $54.42;

Novellus

(NVLS)

was off $2.86, or 5%, at $54.06;

KLA-Tencor

(KLAC) - Get Report

has given up $2.76, or 4.7%, at $56.32;

Lam Research

(LRCX) - Get Report

was down $1.25, or 3.8%, to $31.45; and

Teradyne

(TER) - Get Report

has fallen $1.69, or 3.7%, to $44.21. Meanwhile, the

Philadelphia Semiconductor Sector Index

was off 20.85, or 3%, at 673.89.

Salomon Smith Barney

, which in April caught investors by surprise when it said that semiconductor demand was bottoming, said Wednesday in a note that April's orders for semiconductor equipment also was a bottom. But the extent of the decline could mean that Salomon estimates for bookings in the quarter and the year are too high, analyst Glen Yeung wrote. For the year, Yeung had been expecting orders to hit $13 billion to $14 billion, which is already a 43% to 47% decline in bookings from 2000.

And

Thomas Weisel Partners

also said the bottom must be near. This book-to-bill ratio is far below the 0.56 that it reached in the 1998 semiconductor downturn. "We don't believe that orders will decline significantly further, but instead believe that they will level out before increasing in the fourth quarter," analyst Eric Ross wrote.

Prudential Securities

analyst Shekhar Pramanick isn't sure that April is the bottom, and that could mean that the stocks will come under more pressure. For one thing, semiconductor revenues need to turn up before orders start to climb -- revenues have been falling this year for most semiconductor makers, he wrote in a note.

But when those chip stocks dip down, he said, it's a good time to buy. The potential for increases of 50% over the next 12 to 18 months outweighs the risk of the stocks falling 20% in the near term as it becomes clearer where the semiconductor boom-and-bust cycle stands.

Of course, buying near the bottom isn't quite as lucrative as timing the actual bottom.