Reuters Company News
World semiconductor sales rise 2.8 pct in May
SAN JOSE, Calif., July 1 (Reuters) - Worldwide sales of semiconductors grew 2.8 percent in May from April, as chips used in mobile telephones and consumer electronics offset a slump in computer chips, according to an industry trade group.
The U.S.-based Semiconductor Industry Association (SIA) said worldwide sales grew to $11.37 billion compared to the $11.07 billion in April. Sales figures showed broad-based growth except for computer chips, it said.
However, these near-term comparisons tell only part of the story. May sales actually fell 10.5 percent from year-ago levels of $12.71 billion. The cyclical semiconductor industry has only begun to emerge from two years of slumping sales.
Geographically, only sales in the Asia-Pacific region rose year-over-year -- climbing 22.4 percent in May 2002 from the prior May. Sales in the Americas, Europe and Japan declined by more than 20 percent in each region, the SIA figures showed.
"While the computation sector is down, all other sectors including wireless and consumer continue to thrive," SIA President George Scalise said in a statement.
"This increase drove the sales of such products as flash, digital signal processors, application specific products and analog."
Digital signal processors that form the heart of mobile phones are made by Texas Instruments (NYSE:TXN - News) and Analog Devices Inc. (NYSE:ADI - News). Flash memory producers include Atmel Corp. (NasdaqNM:ATML - News), SanDisk Corp. (NasdaqNM:SNDK - News), STMicroelectronics NV (Paris:STM.PA - News), among others.
Analog chips are made by a vast number of companies, including National Semiconductor (NYSE:NSM - News) and Philips Electronics (Amsterdam:PHG.AS - News). Custom, or application-specific, chips are made by IBM (NYSE:IBM - News), Taiwan Semiconductor (Taiwan:2330.TW - News) and United Microelectronics (Taiwan:2303.TW - News).
Companies at the heart of the computer industry food chain have signaled a slump in second-quarter sales of their products. Computer microprocessor makers like Intel Corp. (NasdaqNM:INTC - News) and Advanced Micro Devices (NYSE:AMD - News), and memory chip suppliers such as Micron Technology Inc. (NYSE:MU - News) have warned in recent months of softer-than-expected demand for such chips.
Geographically, results were mixed, month-to-month.
European chip makers lost ground, with sales declining 2.0 percent in May versus April. Japanese sales role 5.7 percent month over month, while the Americas grew 1.3 percent in May compared with April.
The migration of semiconductor customers to contract manufacturing continues with the Asia/Pacific market, especially China, the beneficiary, the SIA said. In May, sales to Asia/Pacific increased 4.8 percent from April and now represent 37 percent of the worldwide market.
Many electronic devices are now built in the region stretching from Korea to Singapore, then shipped to other markets in the Americas and Europe.
Last month, the SIA released its mid-year market forecast, which asserted that an industry-wide recovery is currently under way.
It expects semiconductor sales to increase by 3.1 percent in 2002 with gains of about 9 percent in both the third and fourth quarters predicted. The growth rate is then expected to accelerate to 23.2 percent in 2003 and 20.9 percent in 2004.
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