Global semiconductor sales continue to rise

Worldwide chip sales has risen 4.5 percent last month, as the industry continues to recover from the recession via healthy sales of PCs, phones and car tech
Written by Ben Woods, Contributor

Worldwide sales of semiconductors rose 4.5 percent to $24.7bn in May, boosted by healthy sales of PCs and other devices.

The sales figure also marked a year-on-year rise of 47.6 percent compared with May 2009, which saw sales of $16.7bn (£10.9bn), the Semiconductor Industry Association (SIA) said in a market report on Tuesday. The trade group attributed the growth to an increase in the sales of computers and mobile phones, as well as the gradual recovery of the automotive market.

"Chip sales have been buoyed by strength in sales of personal computers, cell phones, corporate information technology, industrial applications and autos," said SIA president George Scalise in a statement. "Unit sales of personal computers are now expected to grow by 20 percent this year and cell phone unit sales are predicted to be up 10 to 12 percent over 2009 levels."

However, the SIA noted that any year-on-year comparison should take into account the weak market seen in 2009, when the effects of the downturn were being felt.

"Demand from the corporate information technology and industrial sectors that had pushed out replacement cycles during the global economic recession is beginning to come back," Scalise said

For the month, the European semiconductor market saw a rise of 1.7 percent — comparatively small, compared with the 8.2 percent uplift seen in North America and South America. Japan registered an even smaller improvement of 1.3 percent. The Asia-Pacific region fared better and saw a healthy five percent jump in sales, equalling $13.51bn.

"Emerging markets, including China and India, are fuelling sales of computation and communications products," Scalise said.

Separately on Tuesday, market research firm IDC also published its expectations for the global semiconductor market in the next few years. It predicted that the global chip market will reach $274bn by the end of 2010, growing to $344bn by 2014.

IDC also expects that during 2010 the PC semiconductor market will show year-on-year growth of 35 percent. This will largely be due to blossoming PC application sales, which themselves will be helped by a predicted year-on-year growth of 20 percent across the industrial, military and aerospace, and automotive industries, it said in a statement.

Semiconductor order rates are now returning to normal, from the nine percent year-on-year decline seen in 2009, IDC said. However, Mali Venkatesan, research manager of semiconductors at IDC, warned that the industry may have to wait until early next year to see the growth.

"Global economic recovery that started in the second half of 2009 is in danger of slowing down due to macroeconomic problems such as the euro crisis, continued high unemployment in the U.S., with the associated low consumer sentiment, and the fear of an asset bubble in the Bric [Brazil, Russia, India and China] countries," said Venkatesan in the statement.

Both IDC and SIA said that the increase in the growth of chip sales destined for smartphones, mobile PCs, tablet devices and cars is expected to continue in the second half of 2010 and into 2011.

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