Global chip sales strong in 3Q, says SIA

November 3, 2006 – Worldwide sales of semiconductors reached a record $21.4 billion in September as electronic device manufacturers loaded up for the holiday sales season, according to data from the Semiconductor Industry Association (SIA).

Global chip sales (a three-month moving average) rose to $21.4 billion, up 4.2% from the previous month and 9.3% from the same month a year ago, driven by strong demand for cell phones, MP3 players, and PCs, according to SIA president George Scalise. Actual chip sales more clearly showed the September ramp-up, rising 25.8% sequentially to about $25.57 billion, a 10.3% increase year-on-year.

For the third quarter, chip sales rose about 8% sequentially to $64.1 billion (actual sales were $61.54 billion, up ~10% vs. 2Q06 and 3.7% Y-Y). For the year through September, sales were up 8.5% to $142 billion compared with the same period a year ago (actual sales: +8.9% to $182.66 billion).

Scalise noted strong demand from India and China for cell phones, and PC makers are gearing up for Windows Vista-ready systems by ramping up DRAM output. Sales of DRAM rose 10% sequentially and 40% year-on-year in September, reflecting growth in bit demand as well as tightening supplies, he noted. The microprocessor segment’s growing inventories and price war is illustrated in an 11% year-on-year drop in microprocessor sales.

Anticipating a seasonally strong fourth quarter thanks to consumer demand, and capacity utilization ~95% through the end of the year (quoting VLSI research numbers), Scalise maintained the SIA’s projections for 9.8% sales growth for 2006, ahead of a Nov. 16 forecast update.


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