Global chip sales decline in 2009, increase in last quarter

Global chip sales declined by 9 per cent in 2009 but picked up in the final quarter of 2009 supported by healthy demand in PCs, cell phones, and consumer electronics with China and India, the two key emerging markets driving demand, said the industry body yesterday.

The Semiconductor Industry Association (SIA) said yesterday that worldwide chip sales in 2009 were $226.3 billion, a decline of 9 per cent from 2008 when sales were $248.6 billion, but surpassing the SIA forecast of $219.7 billion for 2009.

Chip sales in December were $22.4 billion, an increase of 29 per cent from the same month of 2008, when sales were $17.4 billion. December sales declined by 1.2 per cent from November when sales were $22.7 billion, said the SIA.

''2009 turned out to be a better year for the global semiconductor industry than expected,'' said SIA president George Scalise. ''A strong focus on inventories throughout the supply chain mitigated the impact of the worldwide economic downturn and positioned the industry for growth as the global economy recovers.''

As the world started to limp back to normalcy in the last quarter of 2009, sales picked up due to a healthy demand in PCs, cell phones and consumer electronics in the final quarter.

In 2010, unit sales of personal computers and cell phones, which account for approximately 60 per cent of total semiconductor consumption, will grow in the low-to-mid teens, providing a solid platform for chip sales, said the SIA.

''Consumer electronics are expected to grow in the mid-single digits,'' Scalise continued. ''We are also seeing the effects of recovery in the enterprise sector and we believe this trend will continue.''

SIA expects a modest slowdown in the first quarter, which is a normal seasonal pattern.

The SIA said that China and India, two key emerging markets, are also driving demand. In addition to purchasing consumer items such as handsets and computers, both regions are continuing to invest in wired and wireless infrastructure. These investments in infrastructure create demand for a broad range of semiconductor products.

''Advances in technology are continually enabling development of new products, such as netbook and tablet computers,'' said Scalise. ''Attractive price points for these products are creating new market segments that hadn't previously existed, and they are adding to overall semiconductor demand.

''With improving consumer confidence and signs of economic recovery around the world, the semiconductor industry is well positioned for growth in 2010,'' Scalise concluded.