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Worldwide chip sales dip in January

Global semiconductor sales dipped 1.7 percent in January, reflecting the industry's traditional post-holiday slowdown, according to the Semiconductor Industry Association.

Worldwide semiconductor sales dipped 1.7 percent in January, reflecting the industry's traditional post-holiday slowdown, the Semiconductor Industry Association said Tuesday.

Preliminary figures show January's average chip sales were $10.01 billion, down 1.7 percent from $10.18 billion in December, the SIA said. The SIA uses a three-month average to account for differences in companies' financial reporting schedules.

The chip dip, however, is typical for January. The industry tends to slow down after the holiday season, with nine of the last 10 January results being lower than those in December, the SIA said.

"January's results are not entirely a surprise...given that (the first quarter) has historically had the weakest (first) month of a quarter, while also being the second-most back-end-weighted quarter," Charles Glavin, an analyst with Credit Suisse First Boston, said in a report issued Monday.

In a back-end-weighted quarter, the majority of sales occur around the last six weeks.

The overall market appears to be improving, Glavin said. But his company believes resurgence will see different market segments recover at different stages. Consumer electronics and PCs are likely to come first, he said, followed by wireless, enterprise and commercial PCs--and finally the telecommunications market.

"We expect to see the industry record slow growth for the first quarter of 2002, with sales rising to double-digit growth in the second half of the year," George Scalise, president of the SIA, said in a statement.

The SIA predicts the semiconductor market will post sales of about $150 billion in 2002. That's about a 7 percent increase from 2001's $139 billion in sales.

The semiconductor market still has a long way to go to match 2000's record year of $204 billion. And it's off to a relatively slow start.

Although January's chip sales decreased slightly on a month-to-month basis, sales were down a whopping 39.8 percent year over year. Sales in January 2001 were $16.6 billion.