May 3, 2005 – Worldwide sales of semiconductors grew by 13.2% in the 1Q05 compared to the same period in2004, the Semiconductor Industry Association (SIA) has reported. Global sales of semiconductors in the 1Q05 amounted to $55.3 billion compared to $48.9 billion in 1Q04.

Sales were up by 0.4% sequentially from revenues of $55.1 billion in the 4Q04. March sales, at $18.4 billion, were up by 2.2% from the February level of $18.0 billion.

“Worldwide sales of semiconductors continued to outpace forecasted levels in the first quarter of 2005,” said SIA president George Scalise. “The first quarter is historically a relatively weak one for the microchip industry. The unexpected strength of semiconductor sales, with 13% growth over a very strong period a year ago, is a good sign for the industry.”

The main factors underlying the industry’s relatively strong first-quarter sales were higher than expected sales of wireless handsets, personal computers, and consumer electronics. “Consumer spending on electronics was stronger than historical patterns for the first quarter despite reports of declining consumer confidence,” said Scalise. “Overall GDP growth of 3.1% in the first quarter reflects underlying strength of the U.S. economy, although this number was slightly lower than the 3.5% growth expected by some economists.

“We expect sales in the current quarter will be flat to nominally higher than the first quarter. As we reported last month, our earlier projection for flat sales for the year as a whole now appears to have been overly cautious,” Scalise concluded.

The SIA will release an updated industry forecast on June 8.

The SIA’s Global Sales Report (GSR) is a three-month moving average of sales activity.