RealTime IT News

Chip Sales Warm Despite Winter Chill

Semiconductor trade groups know that after the holiday rush there is a quiet sales period called January. But this year chips sales have been a little more lively than usual.

After coming off a successful year of double digit chip sales, a new report published Monday by the Semiconductor Industry Association (SIA) shows momentum is still there, as worldwide chip sales rose 26.6 percent year-over-year to $15.5 billion in January 2004. That is up from the $12.28 billion recorded in January 2003.

Nine out of twelve product sectors were down modestly in January from December levels -- typically a 3 percent decrease -- the holdouts being standard cells, analog and programmable logic devices (PLD).

All three sectors recorded flat to modestly rising growth owing to the renewed strength of the wired market, according to the San Jose, Calif.-based trade group.

"For more than a decade now, with the exception of the boom year 2000, sales have been slightly lower in January than December because of the seasonality of the semiconductor industry," SIA president George Scalise said in a statement.

Overall, January 2004 has much more going for it than 2003 did. Conflict in Iraq and the SARs epidemic in Asia crippled chip sales early on. Both factors gave industry watchers pause as the SIA had predicted double-digit growth for this past year.

Scalise said communications, computer and consumer sectors are also forecast to drive performance in 2004, as consumers migrate to new mobile technologies, the wireline business strengthens, businesses upgrade information technology systems, and the economy continues to grow.

"We continue to expect sales for all of 2004 to meet the current forecast of 19.4 percent with broad-based strength in all major end-markets, especially computation, communications, global consumer and automotive."

Regionally, the SIA said all geographic markets were down in January from December, but up strongly over January 2003 levels, including a 34 percent rise in the Asia Pacific market, propelled by growth in China. In addition, the Americas grew 14.8 percent, Europe 19.5 percent, and Japan 32 percent.

The SIA's report is based on a three-year moving average of sales activity. The numbers are tabulated by the World Semiconductor Trade Statistics (WSTS) organization, which represents approximately 66 semiconductor companies.