September 3, 2002 7:33 AM PDT

Chip sales see midsummer boost

Consumer electronics helped the global chip market achieve its first year-over-year revenue gain since early 2001, according to new figures from the Semiconductor Industry Association.

Worldwide chip sales totaled $11.7 billion in July, an 8 percent gain from July 2001's $10.8 billion and a 2.9 percent increase over June's $11.4 billion.

The year-over-year increase was the industry's first since February 2001, which shows that the sector is recovering after hitting bottom last year, the SIA said Monday.

"The July data and the year-on-year increase confirm that a moderate but sustainable recovery continues," SIA President George Scalise said in a statement.

At this rate, the industry could post a 7 percent to 9 percent increase in sales in the third quarter as compared with the second quarter, the SIA said. That growth, however, is coming from different areas--such as consumer electronics and wireless networking--than it did in the past.

"Growth continues to be most robust in the digital consumer market, including DVDs, video games and digital cameras," Scalise said.

Processors and memory for personal computers and wired networking products have driven sales in previous years. But this time around chips for flash memory--which are used to store data in devices such as digital cameras and cell phones--were hot, the SIA said, while revenue for PC chips grew only modestly.

Whereas consumers might have purchased a new PC in past years, many are instead spending their money on DVD players or other devices, analysts have said.

The SIA's figures for July closely match those released recently by World Semiconductor Trade Statistics. That group also said that semiconductor sales in July increased by 2.9 percent over June, reaching $11.68 billion.

The SIA's most recent forecast, released in June, shows worldwide chip sales increasing by about 3 percent this year over 2001.

 

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