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Chip sales set October record, but show signs of slowing

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CIOL Bureau
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Confirming reports of slowing chip demand, the Semiconductor Industry Association said October chip sales rose at the slowest pace since April. Chip sales increased 39 per cent from October 1999 to $18.7 billion, a one-month record. But, the growth rate slowed from the 45 per cent increase posted in September and the 53 per cent rise in August. The slower sales result from slowing demand for PCs around the world, especially in Europe. "The big period of growth looks like it has come to an end. Business has been quite weak, not just in October, but November as well,'' said analyst Rick Whittington (Bank of America).



November sales are expected to show even slower growth and with the traditional slow month of December and January coming up, the chip industry will have to wait until February and March to determine whether the current slow-down is merely a bump in the road to the start of a new slow period in chip sales.



Already a number of chipmakers have come out in the past week with reports of slowing sales, including Xilinx and Altera. "It's too soon to tell how the holiday season will shape up," said SIA analyst Doug Andrey who predicts a "fairly good year'' in 2001, with 22 per cent growth for the industry.



The Japanese market posted the fastest growth in October, with a 47 per cent increase from the same month last year. Revenue in Asia climbed 35 per cent, while sales increased 41 per cent in the Americas and 33 per cent in Europe.

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