Wireless Chips Boost November Sales

By Michael Singer

December 30, 2002

Wi-Fi chipsets show the greatest gains with Flash, Digital Signal Processors and DRAM increasing in popularity, according new trade association numbers.

After a two-year dry spell, the semiconductor marketplace is beginning to really pick up thanks to wireless, according to a report released Monday by the Semiconductor Industry Association (SIA).

The San Jose, Calif.-based trade group's latest Global Sales Report (GSR) indicates global semiconductor sales reached $12.68 billion in November 2002, a 1.3 percent sequential increase from the $12.51 billion in revenue reported in October 2002 continuing the trend that began in the fourth quarter 2001.

Compared to last year, November sales are up 19.6 percent from November 2001 sales of $10.60 billion.

"The November sales of the global chip industry underscores the healthy recovery that has been building momentum through out this year," SIA President George Scalise said in a statement.

The wireless sector continues to be the strongest single market as Wi-Fi has begun to contribute significantly to the overall semiconductor picture. SIA Commutations Director Molly Tuttle told internetnews.com that sales of Wi-Fi chipsets has skyrocketed from 7.9 million units in 2000 to somewhere between 23 and 25 million units by 2002.

"There is some wiggle room depending on how December and the first part of next year plays itself out," said Tuttle. "But being in the 20 percent range means that wireless has continued to spark consumer interest in things like DVDs, cameras, and video games.

After declining more than 26 percent to $24.8 billion in value in 2001, the total semiconductor packaging and assembly marketplace rebounded 7 percent in 2002 with revenue of $26.7 billion, according to statistics from Gartner Dataquest. The analyst group says the chip market is now poised for 10.5 percent growth in 2003, with revenue of $ 29.6 billion.

Currently, SIA is forecasting overall worldwide growth of semiconductors to hit 21 percent in 2003 to $169 billion in revenue, which is more than most sectors.

Other semiconductor products that showed significant growth in November were those related to cell phones and wireless handsets. Led by Flash Memory and Digital Signal Processors, SIA says unit sales were up 6.6 percent for Flash and 3.7 percent for DSPs last month.

"The majority of Flash and DSP sales are coming from people buying new mobile devices to replace older models," said Tuttle. "There are not a lot of new subscribers except in those countries, like China, which are fast growing markets. What we're seeing is a slow process for unit sales overall."

The SIA also says its numbers show chip growth in the PC and server sectors with microprocessor sales up 0.5 percent and DRAM's increasing by 5.8 percent.

Tuttle said the increased rancor over accusations of unfair subsidizes for Korean DRAM manufacturers has not had an impact in sales so far.

Regionally, the SIA said chip sales rose 5.8 percent in November in the European market and 1.3 percent in Asia Pacific. Semiconductor sales in the Americas declined slightly by 0.8 percent and 0.6 percent in Japan.

The GSR is a three-month moving average of sales activity tabulated by the World Semiconductor Trade Statistics (WSTS) organization, which represents approximately 66 companies.

This article originally appeared on internetnews.com.

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