Chip Sales Off To Promising '06: Trade Group

LONDON — Worldwide semiconductor sales got off to a promising start in 2006, with revenues of $19.66 billion in January representing a 7 percent increase on the same period last year in what is historically a weak month.

Figures published Thursday (March 2) by the Semiconductor Industry Association (SIA) show sales down by 1.5 percent from the $19.95 billion reported in December 2005.

The SIA (San Jose, Calif.) notes that global semiconductor sales in January historically show an average sequential decline of 2.2 percent following the seasonally strong fourth quarter.

The Association repeated an earlier forecast that it expects a sequential change in the global market of plus-or-minus 1 percent for the first quarter of the year and suggests that Q1 of 2006 will be substantally more than 1 percent compared to the same quarter of last year.

It said overall capacity utilization increased from 90 percent to 92 percent in the fourth quarter of 2005, and added to the optimism by suggesting capital spending, which was flat in 2005, would grow at between 4 and 6 percent in 2006.

"Retail sales, including consumer electronics products, were relatively strong in January and helped dampen the expected seasonal decline in sales. The industry entered the new year in a healthy condition,” commented SIA President George Scalise.

“There are no excess inventories, end market demand remains strong, and capacity utilization rates are very high. There are signs of recovery in the market for networking equipment, and reports from manufacturers of personal computers and cell phones reflect continued optimism," Scalise added.