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By | Tony Smith 4th November 2004 11:47

Chip trade body revises 2004 sales downward

Anticipated market decline happened sooner than expected

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The Semiconductor Industry Association (SIA) yesterday scaled back its forecast for this year's semiconductor sales, after demand slowed though July, August and September.

In June, the organisation forecast $214bn worth of chips would be sold during 2004, up 28.6 per cent on 2003's total, $166.4bn. Now, it believes this year's sales will come to $213.8bn, 28.5 per cent up on 2003.

The downward adjustment follows the release of September's sales figures, which saw sales rise just one percentage point above August's figure. Traditionally, September's sales have been around 3.3 per cent higher than the August total. August 2004's sales were similarly up just one per cent on July's total.

If that rate of growth is maintained, the year's total will come to $213.6bn, just under the SIA's revised forecast.

Looking forward, the SIA said it believes 2005 will yield chip sales total much the same as 2004, but they will rise 6.3 per cent in 2006 and 14.2 per cent in 2007 to $227.3bn and $259.4bn, respectively.

Essentially, slow growth next year followed by a dip in 2006 has come forward to leave 2005 growth flat, but with the upturn coming a year sooner. The effect is that over the next two years, the industry will sell fewer chips than the previous forecast suggested: $441m in 2005 and 2006, to the $445m the SIA's prior numbers indicated.

Higher growth in 2007 - 14.2 per cent to 11.7 per cent - will, however, boost the ongoing total some $5bn above where it would have been as per previous forecasts. ®

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