Electronic Design

Believe It Or Not, Chip Sales Rise 14%

There is a light at the end of the tunnel, and it might not be a train after all. A recent Semiconductor Industry Association (SIA) report says global chip sales totaled $11.9 billion in August, achieving a 2.2% sequential increase over the $11.7 billion reported for July. Better yet, compared to August 2001, August 2002's chip sales were up 14%. That's the industry's first double-digit increase from its cyclical low in 2001.

SIA president George Scaise be-lieves the semiconductor industry is experiencing a broadly based upturn. He points to 5.6% sequential growth in the first quarter of 2002 and 5.8% growth in the second quarter as well as August's double-digit, year-over-year increase as evidence of a sustained and durable recovery.

Wireless continues to be the strongest end market. New subscribers in Asia and upgrading by existing customers to newer technologies are driving the brisk growth of chips used in handsets. The PC market enjoyed its traditional sequential third-quarter growth derived from back-to-school purchases and anticipation of the consumer holiday season. Sequential increases in microprocessor and DRAM revenues reflected this growth.

Geographically speaking, digital consumer products continue to lead rapid growth in Asia. The Asia/Pacific markets registered 2.7% growth in August, propelled by the rising need for more wireless handsets in China, the world's largest cell-phone market. Chip sales were up 2.8% in Europe, again due to wireless growth. Yet chip sales in the Americas declined 0.7%, reflecting continued outsourcing of equipment manufacturing to Asian locations.

All told, the SIA expects worldwide chip sales to rise by 3% to $143 billion for 2002. It also expects accelerated growth rates exceeding 20% in both 2003 and 2004. For more information about the SIA's Global Sales Report, go to www.semichips.org.

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