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September chip sales edge up 1%

Will the key industry trade forecast be met?

The world's chip makers are in danger of letting down the Semiconductor Industry Association (SIA) as it emerged that September's semiconductor sales left the organisation falling behind its bullish forecast for 2004's total.

Global chip sales edged up sequentially a single percentage point in September to $18.4bn. It's still a big increase over September 2003's $14.5bn, but only a little higher than August 2004's $18.2bn. For the past six years, September has yielded an average increase over the previous month of 3.3 per cent.

Taking the SIA's figures from the first nine months of 2004, you get a total of $157.6bn. The SIA has forecast 2004's overall chip sales will total $216bn, leaving $58.4bn worth of semiconductors to be sold in Q4. That represents a quarter-on-quarter increase of 5.8 per cent. Q-on-Q growth so far has gone from 65.5 per cent between Q2 and Q1 down to 3.2 per cent between Q2 and Q3.

With foundries like TSMC and UMC anticipating bug cuts in fab capacity utilisation during Q4, the prognosis for the quarter's sales does not look good. On the current rate of month-on-month growth, Q4 will yield $56bn in sales, leaving the SIA falling just under its forecast.

The SIA confessed that September, usually a strong month, was "near the low end of the historic range". Rays of hope include the PC and mobile phone markets, in both of which sales were stronger than expected, the SIA said. It attributed September's growth shortfall to the industry-wide inventory correction.

"Continuing strength" in the US economy and rising business IT spending were good omens, too, the SIA said, though chip sales fell in the Americas by 1.7 per cent between September and August. Japanese sales were down 0.5 per cent, though sales in Europe and Asia were up by 4.1 per cent and 1.6 per cent respectively.

Sales in the Americas were up 0.9 per cent between Q2 and Q3, followed by Asia-Pacific (2.6 per cent), Japan (3.2 per cent) and Europe (7.2 per cent). ®

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