SIA: Mope no more, seasonality returns in 1Q

February 1, 2010 – Healthy end-market demand in consumer electronics, and now signs of recovery in the corporate IT sector as well, bode well for chip sales as finally show emergence from the downturn and return to normal seasonal patters, according to the Semiconductor Industry Association (SIA).

The group’s latest monthly figures show significant improvement in year-ago comparisons: Overall December sales were nearly 30% higher than Dec.2008, with >42% growth in both the Americas and Asia-Pacific. Japan improved slightly but still showed a decline from a year ago, indicating its struggles not only in the chip industry but also macroeconomically as well.

Compared with November, overall chip sales actually dipped a bit: -1.2% overall, with only Asia-Pacific managing to squeak out growth (though as the largest region by far that’s a good sign). And the three-month moving average, while slower than in recent periods, still indicates good growth across nearly all regions.

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In the end, 2009 finished with $226.3B in sales, just a -9% decline from the prior year — better than most had thought earlier in the year (and even better than updated forecasts in late fall), attributed from several camps to smart management of inventories.

"In 2010, unit sales of personal computers and cell phones — which account for approximately 60 percent of total semiconductor consumption — will grow in the low-to-mid teens, providing a solid platform for chip sales," stated SIA president George Scalise, in a statement. "We are also seeing the effects of recovery in the enterprise sector and we believe this trend will continue," he added.

In addition, China and India are coming forth as demand-driving emerging markets, Scalise added — both are purchasing PCs and handsets, but also investing in wired/wireless infrastructures, which in turn create more demand for products and applications requiring more semiconductor consumption.

The SIA projects an official return to seasonality with a "modest slowdown" in 1Q10. "With improving consumer confidence and signs of economic recovery around the world, the semiconductor industry is well positioned for growth in 2010," he said.

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