SIA: world chip sales $12.2b in January 2003.

Global semiconductor sales totaled $12.2 billion in January 2003, a 2.4% decrease from the $12.5 billion in revenue reported in December 2002 and a 22% increase from the $10.0 billion total recorded in January 2002, the Semiconductor Industry Association (SIA) reported recently.

"For more than a decade now, with the exception of the boom year 2000, sales have been slightly lower in January than December because of the seasonality of the semiconductor industry", said George Scalise, SIA President. "We continue to forecast double digit revenue growth for 2003 and broad-based strength in our industry, driven by a recovery in information technology (IT) spending, a fast-paced global wireless market, and the emergence of new growth sectors, including Wi-Fi (802.11) and broadband networks using advanced semiconductor technologies."

Market forecasts predict a 4-7% rise in IT spending in 2003 and a 10-14% rise in PC sales, as corporate buyers return to the market. There is an installed base of 160-180 million older units worldwide that need to be replaced in the anticipated upgrade cycle.

The wireless communication market, 25% of final chip demand, drove performance in 2002 and continues to show strength, as consumers migrate to new mobile technology, including smart phones offering digital cameras, e-mail messaging, wireless Internet access and video games.

Reflecting these seasonal demand patterns, eight out of twelve product sectors were down modestly in January from December levels, while Digital Signal Processors (DSPs) were up 3.3%, owing to the strength of the wireless market.

Sales in all geographic markets were down 2-3% in January over December, but up over January 2002, including a 33% rise in the Asia Pacific market, which now constitutes 36% of the total global chip market. "The U.S. and China are the only briskly growing economies in the world," Scalise said, "and China is fueling annual 8% growth with exports, running an historic $103 billion trade surplus with the U.S. last year."

China's semiconductor market is growing 18-20% per year, pushing it past $17 billion in 2002, from $12 billion in 2000, as China seeks to satisfy an increasing portion of its semiconductor demand internally and become a net exporter by the end of the decade.

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' monthly financial calendars.