Falling chip sales cap off a rough 2001

With Semiconductor Industry Association figures indicating that chip sales last year were lower than expected, 2001 is a year no one in the business is likely to miss.

John G. Spooner Staff Writer, CNET News.com
John Spooner
covers the PC market, chips and automotive technology.
John G. Spooner
2 min read
With industry figures showing that chip sales ended last year slightly lower than expected, 2001 is a year no one in the semiconductor business is likely to miss.

The Semiconductor Industry Association (SIA) said Monday that worldwide chip sales totaled $139 billion in 2001, a 32 percent slide from $204 billion in 2000.

The trade group had predicted that sales would drop 31 percent to $141 billion in 2001. Originally, in February 2000, the group predicted a 22 percent gain for the market.

Blame December. Chip sales during the month, which were also announced Monday, were down 4 percent to $10.2 billion from $10.6 billion in November, and were down 43 percent when compared with the December 2000 figure of $17.9 billion.

Sales in December capped off one of the worst years in the industry's history and showed that the road to recovery could be a long one.

However, the SIA said an overall surge in demand for PCs and cell phones during the fourth quarter helped the chip industry match third-quarter chip sales.

Worldwide semiconductor sales in the fourth quarter of 2001 were $30.5 billion, roughly equaling sales in the third quarter of 2001, putting an end to a three-quarter-long chip slump, according to the SIA. The SIA had predicted a 4.7 percent quarter-over-quarter increase.

Despite the lower-than-expected increase, the quarter-over-quarter results are a piece of good news chipmakers can take to the bank, the SIA said.

"Key demand drivers, wireless handsets and personal computers, bottomed out in the third quarter and recorded double-digit increases in the fourth quarter," SIA president George Scalise said in a statement. "Increased sales in markets outside Japan indicate that demand for semiconductors in the major economies is pulling out of a downturn and began to grow in the fourth quarter."

Average sales in all regions except Japan grew on a month-to-month basis in December.

The SIA said sales during the first quarter of 2002 would match or slightly exceed sales during the fourth quarter of 2001. This, it says, is another indication of recovery, because first-quarter chip sales are generally equal to or lower than fourth-quarter sales.

The SIA also said the semiconductor industry will recover during 2002 with sales of $150 billion.