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Tech Industry

Wireless charges global chip sales

Despite a seasonal dip in January, the industry continues to forecast broad growth for 2003, driven by mobile phones and a demand for advanced semiconductor technologies.

Worldwide chip sales saw a seasonal dip in January, but the industry continues to forecast broad growth for 2003, driven by the wireless market and a demand for advanced semiconductor technologies.

Global chip sales totaled $12.2 billion in January, representing a 2.4 percent decline from the $12.5 billion in revenue reported in December 2002, according to the Semiconductor Industry Association (SIA). January 2003 sales, however, still posted a 22 percent increase from the January 2002 sales of $10 billion.

The SIA pegged the December-to-January decline to a yearly sales chill in the semiconductor industry. Following the seasonal demand patterns, eight out of 12 product sectors were down slightly in January from December levels. But digital signal processors (DSPs), which are used to clarify signals, were up 3.3 percent.

"We continue to forecast double-digit revenue growth for 2003, and broad-based strength in our industry, driven by a recovery in information technology (IT) spending, a fast-paced global wireless market and the emergence of new growth sectors, including Wi-Fi (802.11) and broadband networks using advanced semiconductor technologies," George Scalise, SIA president, said in a statement.

The industry organization said that market forecasts estimate a 4 percent to 7 percent jump in IT spending in 2003, with a 10 percent to 14 percent increase in PC sales, as corporate buyers head back to the market.

As in recent SIA reports, the wireless communications market, which makes up 25 percent of the final chip demand, continues to show the same kind of strength that drove performance in 2002. Chips used in cell phones are likely to be in high demand as consumers migrate to new mobile technology, including "smart phones" that offer digital cameras, e-mail messaging, wireless Internet access and video games, according to the SIA.

Though international sales in general were down in January 2003, compared with those in December 2002, sales in January 2002 were sharply higher, including a 33 percent rise in the Asia-Pacific market, which now constitutes 36 percent of the total global chip market.

China's semiconductor market is growing 18 percent to 20 percent per year, pushing it past $17 billion in 2002, from $12 billion two years earlier. The SIA said that China is trying to meet domestic demand first and then aims to become a net exporter by the end of the decade.