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Chip sales inch upward in March

The Semiconductor Industry Association says global chip sales rose 7 percent to $10.8 billion in March, thanks to strong sales of RAM for desktop and notebook computers.

Worldwide chip sales rose again in March, thanks to strong sales of RAM for desktop and notebook computers.

Revenue from sales of semiconductors totaled $10.8 billion in March, about a 7 percent increase over February's $10 billion in sales, according to trade group the Semiconductor Industry Association (SIA). Compared with March 2001's sales of $14.4 billion, however, March 2002 sales were down about 25 percent.

While sales for most chip categories in March were level with February's, DRAM sales rose a record 82.4 percent, the SIA said in a statement Thursday. The increase came from growing demand for memory and resulting price increases.

DRAM prices, which rose in the early part of this year, have leveled off and, in some cases, fallen from their previous highs. At one point, 128-megabit SDRAM chips, the most common kind of memory used in PCs, sold for as much as $4.09 per chip on the spot market. Those prices have since receded to about $3. The Taiwan IC Exchange, which brokers chips, listed 128-megabit DRAM chips for $2.85 to $2.95 on Thursday morning.

PC makers such as Dell Computer have also accused the industry of working to artificially increase prices. Dell CEO Michael Dell on Tuesday characterized a couple of DRAM makers as using "cartel-like behavior" to boost prices.

The SIA said the March month-to-month increase, coupled with a first-quarter increase of 5.6 percent from the fourth quarter of 2001, are the latest signs that the market is back on track.

"The March quarter sales are another sign that the industry is rebuilding from 2001, with growth in all major geographic regions except Japan, which was flat," George Scalise, president of the SIA, said in a statement.

"Quarterly growth of 5.6 percent indicates that inventory...has been worked through and product demand is now beginning to pick up," Scalise added. "The outlook for the second quarter is for single-digit sales growth followed by stronger growth rates in the second half of the year."

The SIA has predicted that the semiconductor industry will close 2002 with $150 billion in sales, a gain of about 7 percent from 2001's $139 billion.

The SIA uses a three-month moving average to record sales. The average is used to account for variations in companies' monthly financial reports.