SIA: DRAM Propels June Semi Sales Up 40%
Online staff -- Electronic News, 8/2/2004
reed-electronics.com
With strong sales of DRAMs up more than 100 percent over last year, the segment pushed worldwide sales of semiconductors to $17.8 billion in June, 40.2 percent higher than June 2003 and 2.9 percent higher than May, the Semiconductor Industry Association (SIA) reported today.
For Q2, global sales reached $53.45 billion, 40.3 percent higher than Q2 2003 and 9.5 percent higher than Q1.
“Worldwide microchip sales remain on pace to reach a record of more than $214 billion this year," said George Scalise, president of the SIA, in a statement. "While we expect sales in the second half of 2004 will remain strong, we expect that the growth rate going forward will be somewhat slower."
SIA expects Q3 sales to be 4 to 6 percent higher than Q2 based on its analysis of inventories, production capacity and end-market demand.
“Sales of personal computers have remained strong, with year-on-year growth of around 13 percent in the second quarter. DRAM prices were especially firm, reflecting strong demand and limited supply during the quarter. With new production capacity coming on line, coupled with higher production resulting from the transition to smaller die sizes, it is likely that the supply-demand situation will ease going forward. The likely result will be more intense competitive pressures,” Scalise noted.
The wireless communications segment was another strong semiconductor demand driver in the first half, with sales wireless communications chips, including DSPs and application-specific standard products (ASSP) for wireless applications, rising 86.5 percent from the same period last year. Sales of optoelectronics devices were up 52.4 percent over last year, reflecting strong sales of digital cameras and picture-capable cell phones.
Going forward, the SIA said key indicators to watch are capacity utilization and inventories. “Capacity utilization was approximately 93 percent at the end of the first quarter, and we believe utilization rose to the mid-90 percent range by the end of the second quarter," Scalise said. "There is some evidence of inventory accumulation in a few sectors, but on the whole, it appears that customers are continuing to manage inventories very carefully. With strong demand from most major end-use markets, we do not believe excess inventories will be a problem in most market sectors in the near term.”
Regionally, the Asia-Pacific market again showed the strongest growth over last year at 61 percent, followed by the Americas at 30 percent, Europe at 29 percent, and Japan at 26 percent.
While the revenue number is strong, June order numbers from the U.S. Department of Commerce, Bureau of the Census’ figures for the North America Industry Classification System (NAICS) were less inspiring, according to Tim Luke, managing director of semiconductor equity research for Lehman Brothers in N.Y.
For PCs in particular, the brokerage firm believes July improved over June and in general, consider the release broadly in-line with its expectations. But the firm also thinks there was some inventory build as evidenced by Q2 company-specific results.
Further, although the near term outlook for the PC market appears mixed, Lehman Brothers believes corporations and consumers are likely to increase spending at a gradual, if measured, pace, on internal hardware and software system upgrades this year, which is likely to drive growth particularly in the second half. |
