By | Tony Smith 1st February 2005 10:04

World chip sales down in December

Stocks still high

Chip sales will fall 4-6 per cent this month, compared to December 2004, the Semiconductor Industry Association (SIA) forecasts.

The organisation has published the latest global sales figures, for December last year. Revenues were $18.37bn, down 3.5 per cent on November's $19.02bn, but 14.6 per cent up on December 2003's sales.

Sales were down in all regions during December. In the Americas they fell 6.2 per cent sequentially to $3.24bn, followed by Asia-Pacific, which sales fall 3.6 per cent to $7.75bn. The Japanese market shrank 2.2 per cent to $3.86bn. European sales fell 2.1 per cent to $3.53bn.

Q4's total came to $55.1bn, down from $55.5bn in Q3.

December's dip knocked the year's sales total to below the SIA's forecast. It had previously forecast full-year sales of $213.8bn, but in the end the total was $212.7bn. Nonetheless, this is a record, and well up on 2003's $166.4bn.

Year-on-year sales growth in H1 2004 of 36.5 per cent was significantly higher than H2 (21 per cent). The second half saw reduced buying levels, in responsed to excessive purchasing in H1.

For January 2005, the SIA expects sales to decline further, by up to six per cent sequentially, on the back of continued inventory reduction efforts. Last week, market watcher iSuppli reported that inventory levels in Q4 2004 had fallen below its original expectations. It forecast that the excess inventory would be cleared during H1 2005.

The traditional post-Christmas decline in consumer sales won't help either, the SIA said. It is sticking to its forecast that 2005 sales will match 2004. ®