June global chips sales up 40 percent year-over-year
By Peter Clarke
Silicon Strategies
08/02/2004, 7:00 AM ET
SAN JOSE, Calif. -- The United States' Semiconductor Industry Association said Monday that worldwide sales of semiconductors rose to $17.82 billion for the month of June, a 40.3 percent increase from June of 2003 when global sales amounted to $12.7 billion. The sequential increase in June was 2.8 percent from the $17.32 billion reported in May.
The figure was a long way ahead of expectations -- Handelsbanken Capital Markets had predicted year-to-year growth of 37 percent for the June three-month average to reach $17.43 billion.
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, which tend to inflate March, June, September and December sales fugures.
Because the June sales figure from the SIA is an average of June, May and April actual sales it also represents the second quarter's sales which therefore reached three times the June figure, $53.45 billion, an increase of 9.5 percent from first-quarter sales of $48.8 billion. Worldwide semiconductor sales amounted to $38.1 billion in the second quarter of 2003, the SIA said.
"Worldwide microchip sales remain on pace to reach a record of more than $214 billion this year," said SIA president George Scalise, 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." Scalise said third quarter sales are expected to be 4 to 6 percent higher than the second quarter based on the SIA's analysis of inventories, production capacity, and end-market demand.
The SIA said that strong sales of dynamic random-access memory (DRAMs), up more than 100 percent year-on-year, were the leading driver of second-quarter growth. "Sales of personal computers have remained strong, with year-on-year growth of around 13 percent in the second quarter," said Scalise. "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."
Wireless communications was another strong driver of demand for semiconductors in the first half of 2004. Sales of chips for wireless communications, including digital signal processors (DSPs) and application-specific standard products for wireless applications, rose by 86.5 percent from the same period a year ago. Reflecting strong sales of digital cameras and cell phones with picture capability, sales of optoelectronics devices were up 52.4 percent year-on-year.
"Key indicators to watch going forward are capacity utilization and inventories," said Scalise. "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. 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."
The Asia-Pacific market again showed the strongest year-on-year growth at 61 percent, followed by the Americas at 30 percent, Europe at 29 percent, and Japan at 26 percent. |
