UPDATE 1-North American chip-gear orders rise 16 pct in May

June 18 (Reuters) - North American manufacturers of equipment used to make semiconductors reported orders of $288.5 million in orders in May 2009, up 16 percent from the previous month, industry data showed.

The book-to-bill ratio was 0.74 in May, meaning that $74 worth of orders were received for every $100 of product shipped, Semiconductor Equipment and Materials International said in a preliminary report.

The ratio is watched as an indicator of the demand pipeline for the industry, as well as for hints about chip capacity and whether the $300 billion semiconductor sector could be headed for a glut.

Orders in May declined about 72 percent compared with a year ago, SEMI said. May billings were $391.9 million, just over 1 percent up from April and about 72 percent less than a year ago.

"Bookings for the North American semiconductor equipment market are still near historically low levels, though the sharp declines have subsided," said Dan Tracy, senior director of Industry Research and Statistics at SEMI.

"While recent industry data show increased semiconductor device unit sales, the industry is waiting for stronger signals to increase capital investments," he added.

U.S. chip equipment makers include Applied Materials Inc (AMAT.O), the world's biggest, testing tools firm KLA Tencor Corp (KLAC.O), circuitry-etching tools company Lam Research Corp (LRCX.O) and Novellus Systems Inc (NVLS.O), which specializes in preparing the surface of a silicon wafer before circuits are laid down.

The SEMI book-to-bill is a ratio of three-month moving averages of worldwide bookings and billings for North America-based chip-equipment makers.

The data contained in the report was compiled by David Powell Inc, an independent financial services firm, without audit, from data submitted directly by the participants.

Billings Bookings Book-to-Bill

(Three-month avg) (Three-month avg) Dec 2008 672.4 579.1 0.86 Jan 2009 584.2 277.2 0.47 Feb 2009 525.5 258.4 0.49 Mar 2009 438.3 245.6 0.56 Apr 2009 (final) 385.7 249.0 0.65 May 2009 (prelim.) 391.9 288.5 0.74 *Source: SEMI June 2009 (Reporting by Bijoy Koyitty in Bangalore; Editing by Ratul Ray Chaudhuri)