April 3, 2006 – Worldwide sales of semiconductors slipped 2% in February after an unusually strong January, following normal seasonal patterns, according to new data from the Semiconductor Industry Association (SIA).

Worldwide chip sales totaled $19.22 billion in February (historically a weak month), down 2.2% from January but up 6.8% from February 2005. Month-on-month, the Asia-Pacific region showed the largest decline (3.6%), while the Americas (0.2%) and Japan (0.4%) remained basically flat. Compared with a year ago, the Americas region displayed strong 17.7% growth, followed by the Asia-Pacific region (14.3%), while chip demand in both Japan (-4.1%) and Europe (-8.1%) was lower than a year ago.

Calculating the three-month average of chip sales, the Americas region was down slightly (0.7%), Europe was down 12%, while other regions saw mid single-digit declines.

SIA president George Scalise also noted that “there is some evidence of inventory accumulation of semiconductors and finished electronic products,” but expressed confidence that the industry will respond as quickly as it did in late 2004 to rebalance inventories within the next quarter.

Scalise pointed to indications of stronger cell phone unit sales, exceeding initial 10% growth projections for 2006, most of which will be due to lower-cost phones in China and India. PC unit growth forecasts remain in line with estimates (8%-10%), and the SIA is holding to its projection for overall industry growth of 7.9%, he added.