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Global chip sales reach record growth

Global sales of chips rose by a record 31 percent year-on-year in February as consumers and businesses snapped up computers and mobile phones and prices rose on the back of tighter supply, a survey found on Friday.
/ Source: Reuters

Global sales of chips rose by a record 31 percent year-on-year in February as consumers and businesses snapped up computers and mobile phones and prices rose on the back of tighter supply, a survey found on Friday.

Global sales of semiconductors rose to $15.58 billion in February, up 0.2 percent compared with the previous month, according to numbers from the World Semiconductor Trade Statistics (WSTS).

"That's the highest year-on-year comparison we've seen so far," said analyst Nicolas Gaudois at Deutsche Bank.

The month-on-month sales increase was the highest since 1986, he added. He referred to the sales figure for the single month of February rather than the WSTS's three-month average figure, which is designed to flatten out single-month bumps.

Paid subscribers such as Deutsche Bank already received detailed WSTS data on Thursday.

Demand for personal computers and mobile phones fuelled the recovery from the industry's worst ever trough in 2001 and 2002, which was blamed on overcapacity and low prices.

"PC-related products are directing the pace, followed by wireless applications like mobile phones and wireless LAN," the European Semiconductor Industry Association (ESIA) said in a statement, reiterating it expected chip sales to grow "well above" 20 percent this year.

Production capacity is getting tighter, helping producers to raise their prices, ESIA added. Average selling prices rose almost seven percent compared with the year-ago period, helping sales growth. Normally prices decline every year due to more efficient production of smaller chips with thinner circuits.

"The last report showed already utilization rates well above 90 percent, with (contract manufacturers) capacities topping it on the level of 99 percent," it added.

Levels above 90 percent usually trigger chip companies to invest in new capacity, and chip manufacturing equipment makers such as ASML and Applied Materials have already reported an upturn of their business.