The chips are up

Worldwide chip sales posted solid gains in August, providing more evidence that the industry is slowly mounting a recovery.

Global chip sales in August increased 14 per cent from August 2001 and 2 per cent sequentially from July 2002, according to the Semiconductor Industry Association (SIA).

The SIA, which maintains a three-month average of chip sales, said global sales for August were $11.9bn, compared with August 2001's $10.5bn and July 2002's $11.7bn. With August showing a second straight month of year-over-year revenue growth, the SIA said a chip recovery is now well under way, albeit slowly.

"The August data confirms that the semiconductor industry is in the midst of a broadly based upturn," George Scalise, SIA president, said in a statement. "After 5.6 per cent sequential growth in the first quarter of 2002 and 5.8 per cent growth in the second quarter, the double-digit year-over-year increase in August sales is yet further evidence of a sustained and durable recovery."

Chips used in wireless devices like cellular phones continue to make the strongest gains, the SIA said. But chips for PCs, including processors and DRAM, showed some gains as well. Prices on many of these chips went up during August, reflecting a better balance of supply and demand, the SIA said.

Meanwhile, sales of chips for consumer electronics, including DVD players, digital cameras and video game consoles, were also strong in some areas such as Japan, the SIA said.

According to the SIA's forecast, the world chip market will post a 3 per cent gain in revenue for 2002. That represents a year-over-year revenue increase from $141bn in 2001 to $143bn this year. This follows a 31 per cent year-over-year decline in revenue in 2001.

John G. Spooner writes for News.com