Global chip sales drop by 3.3%

AMSTERDAM: Semiconductor sales are traditionally slow at the start of the year, as electronics retailers digest Christmas leftovers and Asian business is generally weak over the Chinese New Year. Compared with February a year earlier, sales were 18.1 percent higher, signalling a continuing recovery in the global industry from its worst ever slump, the World Semiconductor Trade Statistics (WSTS) group said.

Annual sales of chips -- essential ingredients for computers, TVs, cellphones and toys -- plunged 34 percent to $140 billion in 2001, spurred by the bust of the dot-com and telecoms spending boom, as well as by slowing economies. But the pace of the recovery has stalled. Year-on-year growth fell below 20 percent in February amid slow economic growth and the build-up to the war in Iraq, while comparable year-ago periods were becoming less depressed.

Asia Pacific and Japan led the sales growth from February 2002, by 26 and 35 percent respectively, with Europe increasing 17 percent and the Americas falling 4.5 percent, the WSTS said. Month-on-month chip sales dropped most in Asia Pacific and the Americas, by over five percent, while sales in Europe and Japan declined by only one percent. In previous months, the decline was virtually the same for all four regions.

The U.S.-based Semiconductor Trade Association (SIA) forecasts 20 percent growth for the global chip industry in 2003, but most analysts have recently become more cautious, expecting around a 10 percent increase in revenues. SIA publishes its monthly update, due later on Monday, on the basis of the WSTS data.

The FTSE European semiconductor index was 5.2 percent lower at 0740 GMT, underperforming the wider European Dow Jones European technology index which fell 4.5 percent.

© Reuters