Chip sales suffer worst drop in May since slump began, says new SIA report
U.S. trade group still believes inventory corrections will ease by the end of Q3 with growth starting in final months of 2001
By J. Robert Lineback
Semiconductor Business News
(07/02/01 08:52 a.m. EST)
SAN JOSE -- Excess inventories and growing economic weakness worldwide pushed chip sales in May to their lowest monthly levels since September 1999, said the Semiconductor Industry Association today. The SIA's new monthly sales report shows chip revenues dropping 7.3% to $12.71 billion in May from $13.72 billion in April.
On a year-to-year basis, chip sales plunged 20.1% from $15.9 billion in May 2000, said the SIA. Worldwide semiconductor revenues have now dropped seven months in a row after sales peaked in October 2000 at $18.7 billion, based on the SIA's three-month moving average.
But the San Jose-based U.S. trade group still believes market conditions will begin to improve in the third quarter.
"The sales for May reflect the current inventory overhang that the semiconductor industry has been experiencing since November," said George Scalise, president of the SIA. "We continue to believe that the industry will begin to see the final phases of the inventory correction late in the third quarter with a broad-based sequential recovery commencing in the fourth quarter."
Based on the belief that the downturn will ease in the final months of 2001, the SIA last month issued a mid-year forecast showing chip sales will drop 14% to $175 billion this year compared to $204 billion in 2000. The SIA is also forecasting 20.5% growth in 2002 and 25% in 2003 (see June 6 story).
But so far, May has been the worst month in the chip industry's downturn in terms of a percentage decline in sales on a month-to-month basis. The month was also bad for all regions of the world, with the Americas showing a 10.9% decline in sales during May to $3.34 billion from $3.75 billion in April, using the SIA's three month moving average. Chip sales in the Americas fell 32.1% from $4.92 billion in May 2000, the new report said.
Semiconductor sales in the Asia Pacific region dropped 4.5% in May to $3.38 billion from $3.54 in April, the SIA report said. The region's chip sales fell 16.6% from $4.05 billion in May last year.
In Japan, semiconductor sales tumbled 5.9% in May to $3.15 billion from $3.35 billion in April. Japan's May chip sales were 10.6% lower than $3.53 billion in the same month last year, said the SIA report.
Chip revenues in Europe dropped 7.8% to $2.83 billion in May compared to $3.07 million in April. Compared to a year ago, Europe's chip sales were 16.6% lower in May than $3.40 billion, said the SIA. |
