Global semiconductr sales down in January

The Semiconductor Industry Association reported that worldwide microchip sales in January were of $18.3 billion, 0.5 percent below December sales of $18.4 billion but 17.5 percent higher than January of 2004 sales of $15.6 billion.

SIA pointed that January is usually a weak month for microchip sales following the typically strong holiday season.

"The modest sequential sales decline of one-half of one percent in January is an encouraging sign," said SIA President George Scalise.
"January is historically one of the weakest months of the year for the microchip industry. We are encouraged by recent signs of strength in the overall U.S. economy, as evidenced by the 3.8 percent growth in gross domestic product (GDP) in the fourth quarter."

"The excess inventories that slowed growth in the second half of 2004 have been largely depleted," Scalise said. "According to iSuppli, excess inventories declined from $1.6 billion at the end of the third quarter to $1 billion at year end. In some market segments, inventories are now below target levels, thus we are confident that inventory issues will not be a significant factor in semiconductor sales beyond the first quarter," he added.

Factory utilization in the industry continued to decline throughout the second half of 2004. Overall utilization was at 86 percent in the fourth quarter, and leading-edge capacity utilization was at 93 percent.

Industry capital spending increased to approximately $47 billion or roughly 22 percent of total sales in 2004. (THG)