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Q1 semiconductor sales up 7.3%, says SIA

Posted: 03 May 2006 ?? ?Print Version ?Bookmark and Share

Keywords:Semiconductor Industry Association? SIA? semiconductor sales? cellphone sales? PC sales?

Worldwide sales of semiconductors of $59.1 billion in Q1 of 2006 were 7.3 percent higher than Q1 of 2005 when global sales were $55.1 billion, the Semiconductor Industry Association (SIA) reported. Sales declined by 1.3 percent from Q4 of 2005, when sales were $59.9 billion. The SIA said the sequential decline reflected normal seasonal patterns.

According to the SIA, March sales of $19.7 billion reflected an increase of 2.3 percent from February sales of $19.6 billion. In March of 2005, worldwide sales of semiconductors amounted to $18.4 billion.

"Very strong sales of cellphones were a major contributor to the year-on-year increase in microchip sales," said SIA president George Scalise. "Cellphone unit sales increased by 31 percent from the first quarter of 2005 and ran substantially ahead of expectations. Unit sales are now expected to reach one billion this year. Cellphones now represent the second-largest market, after PCs, for semiconductors. Cellphones and PCs now account for more than half of all semiconductor sales."

Scalise cited substantially shorter replacement cycle and very robust demand in China as two factors for cellphone growth. "China now has approximately 410 million cellphone subscribers. China is adding new subscribers at the rate of five million a month, and Chinese consumers appear to be choosing high-end phones with increased functionality," he said.

Additionally, unit sales of PCs increased by 13 percent in Q1 compared to the same quarter in 2005, according to IDC. Microprocessor sales were $8.83 billion compared to $8.28 billion in 2005, an increase of 6.8 percent.

Scalise also noted that inventory in the supply chain for some products have been growing as manufacturers build inventory in the expectation of market growth. "End market demand, capacity utilization, and inventories are the most critical factors affecting industry growth. End market demand remains generally strong, and capacity utilization continues to be above 90 percent. We will be closely watching the inventory situation, especially in market segments for consumer products. Rapidly rising energy prices remain a concern."

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