Global chip sales up 4%

AMSTERDAM: Global chip sales increased by four percent to $13.42 billion in August against July, keeping the hard-hit industry on track for a healthy recovery, a U.S.-based industry body said today.

Revenues grew 12.5 percent compared with the same year-ago period, the Semiconductor Industry Association (SIA) said, quoting statistics from the WSTS world chip industry.

The increase was led by chips for consumer electronics, computers and mobile phones, SIA said.

"This rise in end-market demand is generating stronger third-quarter sales than normal seasonal patterns," SIA President George Scalise said in a statement.

With the exception of the year 2000, when the chip industry hit a peak, it was the strongest monthly increase since August 1990, Scalise added.

The SIA as well as many industry and financial analysts believe the chip industry can grow by 10 percent or more this year after rising marginally in 2002 and declining sharply in 2001.

Analyst Nicolas Gaudois at Deutsche Bank in London said he may lift his estimates of eight to nine percent global growth.

"These are good numbers. There is some potential for upside (for global chip sales in 2003)," he said.

The FTSE European semiconductor index climbed 1.2 percent at 216.7 points, slightly under-performing the 1.8 percent higher DJ Stoxx Eurotech index, which was led higher by index heavyweight Nokia.

Investors were getting back in after the Eurotech index had fallen 11 percent lower in recent weeks, an Amsterdam-based fund manager said.

Revenues from microprocessors and DRAM memory chips that go into computers rose the most, up 7.8 percent and 11 percent respectively, as back-to-school demand and recovering company investments led to PC sales growth after three flat years.

Chips that go into DVD players and digital cameras did well too, with sales of application-specific-standard products (ASSP) up 5.3 percent and sales of flash memory for storing pictures and MP3 songs in portable devices up 6.9 percent.

Sales of digital signal processors used in mobile phones were up 4.7 percent.

The SAI/WSTS statistics are a three-month moving average of sales activity to dampen unusual spikes in business, which often occur in months when firms report on their financial results.

© Reuters