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

“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.

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