Chip sales rallied in Q4, says SIA
By J. Robert Lineback
Semiconductor Business News
(02/05/99, 5:03 p.m. EDT)
SAN JOSE, Calif. — World semiconductor sales were stronger than expected at end of 1998, according to new market data released today by the Semiconductor Industry Association. The SIA said chip sales rallied in the fourth quarter to surpass expectations with a 10.5 percent increase over third-quarter revenues.
The U.S. industry trade group said December sales data provide additional evidence that the strong rebound continues from the depth of the market's recession last summer. SIA officials were particularly pleased to see growth returning to the Asian-Pacific region at the end of 1998.
"This stabilization bodes well for favorable sales in 1999," said George Scalise, president of the SIA (San Jose, Calif.).
Using a three-month moving average, the SIA said chip sales in December reached $11.31 billion, bringing the 1998 total to $125.61 billion. In November, the SIA had predicted that 1998 semiconductor revenues would total $122.3 billion, a decline of 10.9 percent from $137.2 billion. The new figures now show the chip markets fell by 8.3 percent in 1998.
"December is the first month in 1998 when two of the world markets showed growth on a year-over-year basis," Scalise said. "Asia-Pacific's sales in December are up 2.4 percent from December 1997, when the financial crisis had not yet taken effect." The Asian-Pacific region's chip sales were $2.645 billion in December 1998 compared to $2.584 billion in December 1997.
In addition, chip sales in Europe increased 5 percent to $2.697 billion in December vs. $2.568 billion in December 1997, according to the SIA's monthly sales report.
Chip sales in the Americas fell 4 percent to $3.653 billion in December compared to $3.803 billion in the prior year. Japan's semiconductor revenues dropped 8.3 percent to $2.317 billion vs. $2.528 billion a year earlier, said the SIA.
Worldwide, December's $11.312 billion in chip sales represented a 1.5 percent decline from $12.114 billion in the same month during 1997. Semiconductor sales in December slipped 0.7 percent from $11.396 billion recorded in November.
The SIA said supply and demand moved closer into balance in the fourth quarter because of cutbacks in semiconductor capital spending. Investments in new wafer fabrication capacity plunged in 1998 as the industry struggled with a glut of chips. The SIA also said chip demand improved in the final three months of 1998 with a recovery in Asian-Pacific markets and continued growth in PC shipments due to lower system prices.
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