Global chip sales slow on inventory build-up

No reason to panic, says trade body

By Tony Smith • Get more from this author

Posted in Financial News, 3rd September 2004 08:57 GMT

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World chip sales reached $18bn in July, up on both June's figure and July 2003's $13bn total, chip trade body the Semiconductor Industry Association (SIA) said yesterday.

June's sales totalled $17.82bn, yielding a sequential growth rate of fractionally over one percentage point. That's a slower rate than SIA had anticipated, the organisation said, blaming a "combination of factors - consumer uncertainty, inventory accumulation... and seasonal issues" for the slowdown.

Certainly, inventory build-ups have been registered by other market watchers, leading to concerns that sales will slow through the rest of the quarter. That could lead to final figures below the big growth forecast by organisation like the SIA for 2004 as a whole.

Like market research company Gartner a few weeks ago, the SIA said it believes the growth in inventory stockpiles isn't yet a cause for concern - indeed, it said, the accumulation remains well below the equivalent figure for the summer of 2000.

The SIA said it is standing by its forecast that Q3's sales will come in 4-6 per cent higher than Q2's, and that the year as a whole will see sales totalling $214bn, up 28 per cent on 2003. ®