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North American-based manufacturers of semiconductor equipment posted $1.23 billion in orders in February 2008 (three-month average basis) and a book-to-bill ratio of 0.93 according to the February 2008 Book-to-Bill Report published Wednesday by SEMI.

The three-month average of worldwide bookings in February 2008 was $1.23 billion. The bookings figure is about eight percent greater than the final January 2008 level of $1.14 billion, but 12 percent less than the $1.40 billion in orders posted in February 2007.

With semiconductor sales essentially running flat, I was able to take solace in the fact that the steeper declines in semiconductor equipment orders were a signal that excess capacity was being soaked up. In fact, semiconductor sales have now likely outstripped orders for new manufacturing equipment for each of the last 12 months.

Unfortunately it hasn’t yet helped semiconductor manufacturers. The SOX index has lost a quarter of its value over that same time period.

If semiconductor manufacturers want to get their stocks’ mojo back, the last thing they should be doing is ordering more capacity in the face of an economic slowdown.

Disclosure: At time of publication, William Trent owns shares of Maxim (NASDAQ:MXIM) and the Semiconductor HOLDRS (NYSEARCA:SMH). He holds put options against the shares of LAM Research (NASDAQ:LRCX).

Source: Semi Equipment Orders Too Strong for Current Downturn