Chip sales continue slow recovery

The semiconductor market was slightly up in October, for the fourth month in a row, but sales for the whole of 2001 will still fall short of last year

The semiconductor industry is continuing on its way to a fragile recovery, according to new industry figures, which found that worldwide sales rose for the fourth month in a row in October.

Sales were up to $10.43bn (£7.3bn) in October, a 2.5 percent increase from the previous month, according to figures published on Monday from the Semiconductor Industry Association. This is the fourth consecutive monthly increase, and puts the industry on track for a 4.7 percent rise for the fourth quarter, according to the SIA.

The figures are good news for the hard-hit chip industry, which has seen sales slide dramatically this year due to the global economic slowdown and particularly to sluggish consumer demand.

"All geographic markets with the exception of Japan had sales increases in the period, led by the United States, which was up 5.1 percent," said SIA president George Scalise in a statement. "Increases in unit demand for a broad cross section of products are being driven by personal computers, cell phones and related communication products, along with a variety of consumer devices."

He reiterated earlier forecasts that the worldwide chip market for the whole of 2001 is set to be 31 percent down on last year, but said that excessive inventories have now largely been cleared and prices are bouncing back in some categories.

The semiconductor industry is very cyclical, and the SIA believes that the fourth quarter of this year will mark the bottom of the current cycle. It predicts that the market will grow 6.3 percent in 2002, accelerating to 21 percent in 2003 and another 21 percent in 2004, when it will hit $218bn.

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