January chip sales better than expected
Although revenues were down 0.5% on December, they were 17.5% higher than the $15.6 billion of sales achieved in January last year. "The modest sequential sales decline 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." Scalise said there were some promising indications that the robust sales would continue.
"We are encouraged by recent signs of strength in the overall US economy, as evidenced by the 3.8% growth in gross domestic product (GDP) in the fourth quarter.
In the past, when US GDP has grown by more than 3%, semiconductor sales have usually expanded at a healthy rate too – except when there are excesses of inventory or production capacity. According to Scalise, neither of these are problems at present.
"The excess inventories that slowed growth in the second half of 2004 have been largely depleted."
"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," said Scalise.
