Orders for semiconductor manufacturing equipment continued to slide in August, an industry group said, reflecting a growing inventory overhang among integrated circuit makers.

Using a three-month rolling average, North American chip-equipment makers received $1.36 billion in orders last month, compared with a three-month average of billings of $1.42 billion. Bookings fell 10% from a revised August figure, while billings fell 5% from August.

The closely watched book-to-bill ratio was 0.96 in September, down from 1.1 in August, according to Semiconductor Equipment and Materials International. A book-to-bill of 0.96 means that $96 worth of orders were received for every $100 of product billed for the month.

"Total billings for semiconductor equipment by North American producers in the first three quarters of 2004 have increased 71% over the same period last year, affirming expectations for strong growth in 2004," the group said in a statement. "The September data reflect the expected decline in bookings as IC companies have responded quickly to increased inventory levels and become cautious about new spending on equipment."

Most semiconductor and semiconductor-equipment stocks were higher Tuesday morning thanks to solid earnings guidance at

Texas Instruments

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Applied Materials

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and the Philadelphia Semiconductor Index were all holding gains approaching 2% in early trading.