It's nice to have industry indexes and sector benchmarks. Digesting a single number is so much easier than trying to make sense out of a jumble of companies, stocks, and diverse products.

What's even better is having one company that can act as a proxy for that big market. That's what we have in semiconductor packaging and testing specialist Siliconware Precision Industries (NASDAQ:SPIL). One look at Siliconware's results will tell you how the whole chip industry is doing.

Though about 75% of Siliconware's revenue comes from fabless customers like Broadcom (NASDAQ:BRCM) and NVIDIA (NASDAQ:NVDA), large designers with some in-house manufacturing lines like Intel (NASDAQ:INTC) and SanDisk (NASDAQ:SNDK) also use Siliconware's chip testing and packaging services. So when the company's order book dries up, it's a sure sign of deep and dark malaise in the entire sector.

And of course, that's exactly what happened in the fourth quarter of fiscal 2008. Siliconware reported a net loss of $0.05 per depositary share on sales of $366 million. That's down from profits of $0.19 per ADS in the year-ago quarter and $0.16 per ADS in the third quarter. Sales fell by 28% sequentially and 30% year over year.

Those results include about $0.10 per ADS of non-cash impairment charges, as announced in mid-January. So Siliconware sort of made money after all, and even generated about $171 million of operating cash flow. As bad as the quarter was, demand is still healthy enough to keep Siliconware on life support -- and by extension, keep the chip sector running a while longer.

Keep an eye on this stock, dear Fool. Since Intel and the other big boys have to package and test their chips before sending them out to retail stores like Best Buy (NYSE:BBY) or system builders of Dell's (NASDAQ:DELL) ilk, Siliconware has a bit of predictive power. What you're seeing now is the state of the industry in the next couple of months.

What Siliconware is saying at the moment jibes pretty well with reports from its major customers. But if the next quarter takes a drastic turn for the better or worse, you could steal a march on Mr. Market. It's not quite a crystal ball, but any information advantage is better than nothing.

Further Foolishness:

Intel, Dell, and Best Buy are Motley Fool Inside Value selections. NVIDIA and Best Buy are Motley Fool Stock Advisor recommendations. The Fool owns shares of Best Buy and Intel. It also owns covered calls of Intel. Try any of our Foolish newsletters today, free for 30 days.

Fool contributor Anders Bylund holds no position in any of the companies discussed here. You can check out Anders' holdings or a concise bio if you like, and The Motley Fool is investors writing for investors.