Chip sales buoyed by wireless market, group says

Global chip sales are on the upswing, propelled by a growing wireless market, according to new data from the Semiconductor Industry Association.

Chip sales jumped to $16.94 billion in April, the highest monthly level since July 2000, according to information released Tuesday by the San Jose, Calif.-based group. The figure represents a 36.6 percent jump compared with April 2003.

The new figures are seen as a positive sign, because traditionally, chip sales peak during April, and the momentum generated during the month is likely to continue during rest of the year.

The organization attributed the growth in sales to the strong performance of chips like digital signal processors, or DSPs, which are used in mobile phones. Sales of DSPs rose by 6.8 percent, while application-specific standard products for wireless devices showed growth of 8.8 percent. Sales of flash memory devices grew by 3.2 percent.

PC sales, coupled with sales of memory for computers, drove the demand for dynamic RAM, which recorded growth of 10.3 percent, compared with March. Sales of image-sensing devices grew 7.6 percent compared with March, fueled by strong sales of digital still cameras and camera phones, the organization said.

"Continued strong overall economic growth in the United States and China helped propel chip sales upward," SIA President George Scalise said in a statement. "The fundamentals are in place for strong growth through the remainder of the year, and it is likely that growth for 2004 will significantly surpass last fall's forecast of 19 percent growth."

According to another forecast released this week, chip sales are likely to reach $213.6 billion during 2004, mainly because of demand for personal computers, cell phones and DVD recorders. This would be an increase of 28.4 percent compared with last year, according to the forecast, released by the World Semiconductor Trade Statistics organization.