Chip sales increase strongest since 1990

Semiconductor sales are on track to hit 10 percent growth for the year, as consumers and businesses return to the PC market

Semiconductor makers worldwide recorded higher sales in September, in the industry's seventh consecutive monthly increase, and a sign of a return to steady growth, according to industry observers.

Sales were up 6.5 percent worldwide to $14.4bn (£9.2bn) in September, from $13.6bn in August, in the strongest percentage change since 1990, the Semiconductor Industry Association (SIA) said on Monday. For the third quarter of 2003, worldwide revenues were $43.3bn, a 17.5 percent increase over the same quarter last year and a 13.7 percent rise over the second quarter of 2003, the group said.

The figures show that worldwide demand is rising briskly. "Performance is strong in all major market sectors -- computation, communications and consumer, indicating a solid, continuing and broad-based growth cycle," said SIA president George Scalise in a statement.

Europe grew 12 percent for September, behind only Asia Pacific at 19.1 percent. Japan grew 11 percent and the Americas at 8.6 percent, the SIA said. The growth across these four geographic regions positions the industry for annual growth of more than 10 percent for this year, reaching further into the double digits next year, the SIA predicts.

In August, research firm Gartner also observed that chip sales were showing definitive signs of a recovery. The firm was more bullish than the SIA in its forecast, saying that the worldwide semiconductor market should reach $173bn in 2003, compared with $156bn last year, which is an 11.2 percent increase. The SIA has forecast a growth of 10.1 percent for 2003.

In a further sign that growth is building on strong foundations, the PC market -- which accounts for 30 percent of semiconductor sales -- was driven by both consumer and business spending. Consumer buying rose a record 6.6 percent for the quarter, while business spending grew 15.4 percent, following an 8.3 percent rise in the second quarter of 2003.

Flash-memory chips grew 27.2 percent for the quarter and signal-processing chips grew 20.3 percent, driven by mobile phones, the SIA said.

CNET's Dinesh C Sharma contributed to this report.