January 2, 2007 – Global chip sales increased 11.3% in November to $22.7 billion, building on record totals for the fifth consecutive month, and the stage is set for another good year in 2007 according to the Semiconductor Industry Association (SIA).

With just one month to go in 2006, global chip sales totaled $225.1 billion in Jan-Nov. 2006, a 9.4% increase from the same period a year ago. Europe led all regions based on a three-month moving average, with sales growth of 14.8% (vs. overall average of 10.7%), followed by the Asia-Pacific (12.9%) and Japan (8.6%), with the Americas trailing with 3.8% growth.

Chip sales in November rose 3.1% vs. October, and 11.3% compared with November 2005. Leading the way was the Asia-Pacific region with growth of 4.4% M-M and 15.0% Y-Y. Europe followed closely behind on a M-M basis (2.0%), while Japan saw a year-on-year surge of 13.0%. The Americas region was the notable laggard during the month, with just 3.8% month-on-month growth, and a 0.5% decline year-on-year.

Despite some softness in average selling prices (ASP), consumer applications continued to drive demand in November, with better-than-expected unit sales of consumer products such as flat-panel displays and digital cameras, noted SIA president George Scalise, citing data from the Consumer Electronics Association (CEA). Digital camera sales in the US were up 30% year-on-year in November, and 40% through the first 11 months of 2006. Strong sequential growth was seen in digital signal processors (DSP, +12.3%), DRAMs (6.8%), NAND flash (6.3%), and microprocessors (4.3%).

Scalise pointed to survey data from research firm Conference Board showing consumer confidence and increasing optimism, with an improving job market and indications of healthy economic growth growing forward. Inventories are in line with demand in most major product segments, but some memory products are seeing tightening supplies, he noted.

Scalise pointed out that 2006 looks to end up fairly close to the SIA’s 9.4% forecast, and “2007 is shaping up to be another good year for the industry,” with growth of about 10%.