SIA: Global chip sales leap in May

SIA: Global chip sales leap in May

Global semiconductor sales rose in May due mainly to a blistering mobile phone market, according to the Semiconductor Industry Association (SIA).

Chip sales rose to $US18.05 billion in May, up 4 per cent from $US17.34 billion during the same month last year. Strong monthly sales growth are expected to help pace overall growth for the worldwide chip industry in 2005.

A number of market researchers and organisations such as SIA have already boosted full-year forecasts for the chip industry in recent months. Last month, SIA forecast the global chip industry would reach record sales of $US226 billion in 2005, up 6 per cent from last year. It had previously predicted no growth.

Unit sales of mobile phones continued to outpace earlier forecasts, contributing to growth in sales of semiconductor products such as digital signal processors (DSPs) and analogue chips, SIA president, George Scalise, said in a statement. However, slumping prices for dynamic RAM (DRAM) chips dragged down the sector in May.

Global chip sales fell by half a percentage point in May compared to April sales of $US18.14 billion, the second consecutive monthly decline caused by falling DRAM prices.

On the DRAM spot market, prices of the most widely used chips, 256MB DDR DRAM that run at 400MHz, tumbled to their lowest price of the year on May 23, at $US2.25 per chip, compared with $US4.04 at the start of the year, according to DRAMeXchange, an online clearinghouse for the chips.

The bad news for computer buyers is the price has rebounded nearly 8 per cent to $US2.42 at the time of writing, and many people in the industry expect chip prices to continue to rise in the second half of the year.

"We feel that prices bottomed in June and will bounce back strongly," a vice-president at DRAM maker ProMOS Technologies, Albert Lin, said. "I still think this will be a profitable year for DRAM."

Charting Chip Sales

May 2005 $US18.05 billion

May 2004 $US 17.34 billion

Chip prices 2005

256MB DDR DRAM (400mhz)

January $US4.04 May 23 $US2.25 July $US2.42

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