Chip sales continue recovery

The semiconductor market was slightly up in October 2001, for the fourth month in a row, but sales for the whole of 2001 will still fall short of last year, according to figures from the Semiconductor Industry Association.

Sales were up to $20 billion in October, a 2.5% increase from the previous month. This is the fourth consecutive monthly increase, and the SIA argues this puts the industry on track for a 5% rise for the fourth quarter.

"Increases in unit demand for a broad cross section of products are being driven by personal computers, cell phones and related communication products, along with a variety of consumer devices," said George Scalise, SIA president.

He reiterated earlier forecasts that the worldwide chip market for the whole of 2001 is set to be 31% down on last year, but said that excessive inventories have now largely been cleared and prices are bouncing back in some categories.

The semiconductor industry is very cyclical, and the SIA believes that the fourth quarter of this year will mark the bottom of the current cycle. It predicts that the market will grow 6% in 2002, accelerating to 21% in 2003 and another 21% in 2004, when it will hit $430 billion.