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Global Chip Sales Rise 4% in August

A U.S.-based trade group says the hard-hit industry remains on track for recovery.

September 30, 2003|From Reuters

Global chip sales increased to $13.42 billion in August, up 4% from July, keeping the hard-hit industry on track for a healthy recovery, a U.S.-based trade group said Monday.

Revenue grew 12.5% from a year earlier, the Semiconductor Industry Assn. said, quoting data from the World Semiconductor Trade Statistics organization.

The increase was led by demand for chip-hungry electronics such as consumer gadgets, computers and mobile phones, the association said.

"This rise in end-market demand is generating stronger third-quarter sales than normal seasonal patterns," said George Scalise, the group's president.

With the exception of 2000, when the chip industry hit a peak, the increase was the best for one month since August 1990, Scalise said.

The association, like many industry and financial analysts, believes that the chip industry can grow 10% or more this year after rising marginally in 2002 and declining sharply in 2001.

At least two analysts discussed raising industry sales growth estimates after reviewing the numbers reported for August.

J.P. Morgan analyst Christopher Danely said he expected chip industry sales to rise 15% this year; his previous forecast was 12%. Prices of chips, he said, rose nearly 13% in August, above his expectations.

Analyst Nicolas Gaudois at Deutsche Bank in London said he might lift his estimates of 8% to 9% global growth for the year.

Revenue from microprocessors and dynamic random access memory chips that go into computers rose the most in August, up 7.8% and 11%, 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 rising 5.3% and sales of flash memory for storing pictures and MP3 songs in portable devices up 6.9%. Sales of chips used in mobile phones rose 4.7%.

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