Utilization rates well above 90 percent, with foundry capacities topping it on the level of 99 percent.
February chip market sales up 30.8% y-on-y (updated)
By Peter Clarke
Silicon Strategies
04/02/2004, 5:33 AM ET
LONDON -- Global chip sales were $15.58 billion in February, according to three-month average numbers from World Semiconductor Trade Statistics (WSTS). This was ahead of expectations -- analysts had predicted a figure of $15.25 billion -- up 0.2 percent on January 2004 and up 30.8 percent on the same month a year before.
The world's semiconductor industry associations put out sales reports as three-month moving averages of monthly sales activity to smooth out variations due to companies' monthly financial calendars.
The European Semiconductor Industry Assocaiation (ESIA) issued the numbers and assigned the growth to sales of PCs and PC-related purchasing, followed by mobile phones, Bluetooth and wireless LAN. The ESIA said there was now "no question" that annual growth could top 20 percent in 2004.
As the United States Semiconductor Industry Association (SIA) also published the numbers it noted that February is historically a relatively weak month for chip sales.
"The strong year-on-year growth of more than 30 percent reflects the steady improvement in business conditions, a trend which we expect will continue throughout 2004," said SIA president George Scalise, in a statement. "The modest sequential growth in worldwide semiconductor sales reported for February is consistent with normal cyclical patterns. While growth was largely driven by a rebound in corporate information technology spending, the current growth cycle extends to all end markets and major product areas. We are encouraged by the recovery in demand in the wireline communications sector. Customers remain cautious about inventories, and February shipments actually trailed semiconductor consumption. As a result, we do not expect inventory corrections will be a drag on chip sales going forward."
The SIA noted that sales of programmable logic devices and standard cell ASICs grew in February by 4.3 percent, driven by a recovery in the wireline communications market.
The wireless communications sector and consumer electronics, which propelled the growth cycle with strong, double-digit increases in 2003 were flat to down in the month, but are expected to exhibit renewed momentum as the year progresses, the SIA said.
Talking of capacity utilization reports the ESIA said in its statement: "The last report showed already utilization rates well above 90 percent, with foundry capacities topping it on the level of 99 percent." ESIA predicted continued tightness of supply and rising chip prices.
However, the recovery continues to be driven by a move eastwards. While the America's and Europe scored apparently respectable year-on-year growth figures in dollar terms of 20.1 percent and 20.8 respectively Japan's sales climbed 30.2 percent in February and the Asia-Pacific region soared 42.8 percent.
In terms of the local euro currency the European region sales were only up 1.7 percent compared with the same month a year before while the euro has strengthened by 16.7 percent during the year.
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