Global chip sales growth moderates

Worldwide sales of semiconductors rose slightly to $18 billion in July, an increase of 1.0 percent from the $17.8 billion reported by the Semiconductor Industry Association in June.

Worldwide sales of semiconductors rose slightly to $18 billion in July, an increase of 1.0 percent from the $17.8 billion reported in June and 37.9 percent from the $13 billion reported in July 2003, the Semiconductor Industry Association (SIA) reported today. The SIA said the slower growth rate for chip sales was not unexpected.

“The latest numbers reflect a slower growth rate for worldwide sales of semiconductors as previously projected,” said SIA President George Scalise. “A combination of factors such as consumer uncertainty, inventory accumulation in key sectors, and seasonal issues in some markets, resulted in modest sequential sales growth from June.

“The strong US economy is creating favourable conditions for sales of PCs, autos, and consumer electronics through the remainder of the year. If these end markets for semiconductors follow normal seasonal patterns, we expect to see solid growth rates for the semiconductor industry through the remainder of the year.”

Scalise said that while inventories are a minor concern, inventory levels remain considerably lower than comparable levels in the summer of 2000.

“There are also indications that consumer concerns over issues such as oil prices, the US elections, and geopolitical developments are affecting household spending patterns. We continue to forecast sequential growth of 4 to 6 percent for the third quarter compared to the second quarter, and the industry remains on track for year-on-year growth of approximately 28 percent and record sales of $214 billion,” Scalise concluded.

The SIA reported that sales growth rates slowed sequentially in all regions except Europe. According to VLSI Research, capacity utilisation is forecasted to decline slightly from 95 percent in the second quarter to approximately 93 percent in the third quarter.