Low Cost Cellphones Drive Semiconductors Sales

Worldwide sales of semiconductors of US$19.22 billion in February were 6.8% higher than February of 2005, reports the Semiconductor Industry Association (SIA). February sales reflected a 2.2% sequential decline from the US$19.65 billion reported in January. SIA noted that February is historically a weak month for semiconductor sales.

"Global sales of semiconductors in February followed normal seasonal patterns reflecting slower sales of consumer electronic purchases, which are now the principal driver of semiconductor demand," said SIA President George Scalise. "There is some evidence of inventory accumulation of semiconductors and finished electronic products during the first quarter of 2006. We expect the electronic industry supply chain will respond quickly as it did late in 2004 and that inventories will be in balance by the third quarter.

"There are indications that unit sales of cell phones will exceed earlier forecasts of 10 percent growth for 2006," Scalise continued. "Most of the upside is projected to be in lower-cost phones in China and India. The market for personal computers is meeting expectations of 8 to 10 percent unit growth in 2006 as evidenced by a year-on-year increase of 6.9 percent in microprocessor sales. We continue to believe our forecast for 7.9 percent growth for 2006 will be achieved," Scalise concluded.

The SIA's Global Sales Report (GSR) is a three-month moving average of sales activity. The GSR is tabulated by the World Semiconductor Trade Statistics (WSTS) organization, which represents approximately 66 companies. The moving average is a mathematical smoothing technique that mitigates variations due to companies' financial calendars."

Posted to the site on 2nd May 2006