Semiconductor sales rise

Semiconductors sales grew to $18.8 billion in October, an increase of 1.5 percent from the $18.5 billion in September and 22 percent higher than sales in October 2003.

Worldwide sales of semiconductors grew to $18.8 billion in October, an increase of 1.5 percent from the $18.5 billion in September and 22 percent higher than the $15.4 billion in sales in October 2003.

“Worldwide semiconductor sales were up by 1.5 percent in October, reflecting ongoing inventory corrections in certain market segments,” said Semiconductor Industry Association (SIA) President George Scalise. “Sales of digital signal processors (DSP) rose by 8.5 percent sequentially, a sign that the inventory correction that began in the wireless handset market in July has run its course. Personal computer sales traditionally peak in the fourth quarter, driven by holiday purchases.”

Scalise continued: “This year’s PC sales have been further buoyed by strength in the corporate market. Sequential sales growth of 6.4 percent for microprocessors and 2.8 percent for DRAMs are signs that excess inventories of these products have also been worked out of the supply chain.

“Consumer electronics are becoming an increasingly important driver of growth for the semiconductor industry. Sales of consumer electronics are especially strong in the fourth quarter as the holiday build continues. Consumer electronics sales may be modulated somewhat this season by slower than expected growth in the sales of digital video recorders (DVR) and a very competitive market in DVD players, factors that have put pressure on component suppliers.

“Continuing high energy prices are clearly having some effect on discretionary spending by consumers, reducing visibility for the industry outlook for December sales. While we now expect that fourth-quarter sales will be essentially flat at third-quarter levels, we continue to project year-on-year growth of at least 28 percent,” concluded Scalise.

The SIA reported that capacity utilisation declined modestly in the third quarter, falling from 95 percent to 93 percent. Factory utilisation for leading-edge facilities and foundries remained strong, at 96 percent and 98 percent respectively. Sales in all geographic regions except Japan were up sequentially in October.