SIA posts 'strong' August global chip sales of $18.2 billion
By Peter Clarke
Silicon Strategies
09/30/2004, 5:27 AM ET
SAN JOSE, Calif. — The Semiconductor Industry Association (SIA) has announced that worldwide sales of semiconductors rose to $18.2 billion for the month of August. This is ahead of expectations of $18.0 billion (see Tuesday, September 28 story) and 34.2 percent ahead of the equivalent figure in 2003.
It represents a strong bounce after fears of inventory correction had percolated the industry and is ascribed to strong PC and wireless infrasstructure sales, as well as fast inventory correction.
The August worldwide sales figure publicized by the SIA is an average of the 'actual' sales figures for June, July and August. The July 2004 average sales figure was $18.0 billion, which was up 37.9 percent from the $13 billion reported in July 2003.
The world's semiconductor industry associations put out sales reports as three-month 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 figures.
"Semiconductor producers and their customers have reacted with unprecedented speed to recent reports of excess chip inventories," said SIA president George Scalise, in a statement. "In previous market cycles, it has generally taken several quarters for the supply chain to take corrective action. When the first reports of excess inventory accumulation surfaced in the second quarter, both producers and customers moved quickly to adjust. Both VLSI Research and iSuppli are now reporting that chip inventories are declining," Scalise said.
Scalise said that manufacturing capacity utilization has declined reaching 95 percent in the second quarter but with leading-edge and foundry capacity running at 99 percent. "We expect a modest decline in capacity utilization rates in the current quarter," said Scalise. "Capital spending has been running at around 23 percent of sales, which is in line with historical patterns. At this time, we do not believe overcapacity will be a major concern in 2005," he said.
"With both producers and customers paying close attention to chip inventories and taking action quickly, we expect that semiconductor sales will continue to show steady growth through the balance of the year and will meet the current forecast of 28 percent growth for all of 2004," said Scalise. SIA will release its 2005 industry forecast on November 3.
The SIA noted that sales of personal computers and equipment for networking and telecommunications contributed to semiconductor sales growth in August. Sales of microprocessors increased by 3.5 percent sequentially, reflecting PC sales patterns of the back-to-school season.
Chip sales were up modestly in all geographic regions. In the Asia-Pacific region, however, sales increased by only 0.1 percent sequentially, reflecting the impact of inventory adjustment actions taken by manufacturers of electronic products. |
