Global Chip Sales Up 14 Percent, Trade Group Says
Tuesday October 1, 1:35 pm ET
By Duncan Martell
SAN FRANCISCO (Reuters) - Global sales of semiconductors rose 2.2 percent in August from July and rose 14 percent from August a year ago, figures that show the beleaguered industry is tracking a broadly based upturn, a trade group said on Tuesday.
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The 14 percent increase in August, to $11.9 billion, from the same month a year ago was the first double-digit increase from the industry's cyclical low in 2001, the worst-ever year for the chip industry, the Semiconductor Industry Association(SIA) said in its monthly global sales report.
Global chip sales were $11.7 billion in July. August's 14 percent growth from the same month a year ago follows an 8 percent increase in July from July of last year, the SIA said.
"After 5.6 percent sequential growth in the first quarter of 2002 and 5.8 percent growth in the second quarter, the double-digit year-over-year increase in August sales is yet further evidence of a sustained and durable recovery," said SIA President George Scalise in a statement.
The wireless market continues to be the strongest, paced by strong growth of chips used in handsets and fueled by subscriber growth in cellular service in Asia and by existing customers upgrade to phones with newer technologies, the SIA said. China is the biggest cell phone market in the world.
While chip companies such as Intel Corp. (NasdaqNM:INTC - News), National Semiconductor Corp. (NYSE:NSM - News) and PC makers such as Hewlett-Packard Co. (NYSE:HPQ - News) have said the back-to-school season was muted this year, the SIA said that sequential increases in processor and memory-chip revenues pointed to some strength.
Merrill Lynch analyst Joe Osha wrote in a report that average selling prices for microprocessors rose 15 percent in August from July, while overall processor revenue increased 28 percent in August from July, after falling 47 percent the previous month.
"Our checks suggest that shipments in the first two weeks of ... September were up modestly from August, but really began to improve in the latter half of the month," Osha wrote.
Digital consumer products, such as DVD players, digital cameras and video games, led rapid growth in Asia markets, the SIA said. Chip consumption in Japan rose 3.5 percent in August from July, reflecting that country's strong export sales of popular consumer products.
The Asia Pacific market saw growth of 2.7 percent in August from July, paced by strong demand for handsets as more subscribers sign up for cellular service in China. Chip sales in the Americas declined 0.7 percent, the SIA said, reflecting the continuation of equipment manufacturing outsourcing to Asia locations. Sales in Europe climbed 2.8 percent in August from July, mostly due to the wireless sector.
For all of 2002, the SIA expects global semiconductor sales to rise by 3 percent to $143 billion, and it continues to forecast aggressive growth rates exceeding 20 percent in both 2003 and 2004.
The SIA's monthly sales report is a three-month moving average, a tabulation that helps to mitigate variations due to companies' monthly financial calendars. The sales report is calculated by the World Semiconductor Trade Statistics (WSTS) organization, which represents some 66 companies.
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