Chip Sales Soared to $23B in March, SIA Says

Consumer demand for PCs and cell phones, along with business purchases of computing and communications equipment, helped push chip sales to $23.1 billion in March, according to the Semiconductor Industry Association.

From February to March, semiconductor sales increased 4.6 percent, according to SIA’s May 3 report. Chip sales also increased a staggering 58 percent from March 2009, when the global recession nearly brought tech spending to a standstill, to March 2010.

In addition, the SIA report found global chip sales increased from $43.7 billion in the first quarter of 2009 to $69.2 billion during the first three months of 2010. This could mean that worldwide chip sales could realize double-digit growth in 2010.

“The current results reflect improved sales in a variety of market segments, including the enterprise sector where recovery has been slower than in the consumer sector,” SIA President George Scalise wrote in the report.

“Healthy economic growth in China and growing demand for PCs and cell phones in developing economies were major contributors to growth in the first quarter. Continued growth for the semiconductor industry is closely tied to continuation of the global economic recovery. We remain cautiously optimistic that global sales will show double-digit growth in 2010,” Scalise added.

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The SIA report indicates that the tech sector at least is beginning to pull out of the global recession, although the jobs market is stagnant and unemployment remains high. The SIA survey echoes a similar report by IDC, which found the market for x86 processors rebounded in the first quarter of 2010 as demand for PCs increased. (While the IDC report looks specifically at x86 chips, the SIA survey considers all semiconductor sales.)

Right now, business computing and communications equipment, which represents about 60 percent of the semiconductor market, is experiencing “healthy unit growth,” while PC sales are expected to increase to between the mid- and high teens, according to SIA. Cell phone growth is expected to increase in only single digits.

The SIA report also found that foundries, or fabs, and device manufacturers are ramping up production to meet demand. However, SIA did not find that vendors are dealing with excessive chip inventories, since demand for PCs and phones is increasing.