SIA: Climate improving for chip sales

June 1, 2009 – More evidence that the chip industry might have found its bottom and is starting to climb: April chip sales posted a better-than-expected 6.4% increase in April, attributed to PC demand and inventory rebuilds, according to the Semiconductor Industry Association’s (SIA) latest monthly figures.

Chip sales in April totaled $14.7B, up 6.4% from March and down -25% from April 2009 (which is better than the -30% Y/Y declines seen in the past few months). The three-month moving average sales slipped back into positive territory (1.9%) for the first time since October.

By geography, the Asia-Pacific region bounced back with nearly 12% growth month-on-month, and the Americas and Japan swung back to small single-digit gains, with only Europe just beneath the waterline (-0.9%). Compared with a year ago, percentages still look ugly across the board (-17% to -39%), about where they’ve been in recent months, with slight improvement.

SIA president George Scalise attributed the April upside to stronger PC and cell-phone markets than had been predicted, which together represent roughly 60% of semiconductor consumption. PC shipments now are expected to decline by -6% for the full year, instead of the previously forecasted -12%, he stated. Cell phone unit sales likewise are seen declining only half of what had been thought (-7% instead of -15%).

Other markets are still a drag, though. Autos (representing 7% of semiconductor consumption) “remains week,” the SIA noted, and corporate IT spending still lags normal patterns with longer replacement cycles. Analysis of consumer electronics remains mixed; sales of digital TVs and handheld gaming systems are seen increasing, while most other consumer electronics products should expect lower unit sales.

While visibility remains limited, Scalise suggested that “two consecutive months of sequential sales growth may be an indication of a return to more normal seasonal sales patterns in some market sectors, albeit at lower sales levels than last year.”


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