The worldwide market for semiconductors is growing, but the European sector continues to suffer.
According to the latest research from the Semiconductor Industry Association (SIA), May was another strong month for chip sales worldwide, with China and the US doing particularly well. Sales in May were $17.3bn, up 2.1 per cent on April's $17bn.
Although May is traditionally a strong month for chip sales and the rise was expected, this latest increase confirms that the chip market is finally back on its feet. To date, the market is up almost 40 per cent on the same period in 2003.
"Worldwide sales of microchips followed historical patterns in May, which is normally a strong month for the industry," said George Scalise, president of the SIA.
"At $17.3bn, global semiconductor sales reached their highest level since December 2000, reflecting continued healthy economic growth, especially in the US and China.
"The industry fundamentals continue to look good, leading us to expect strong growth through the remainder of 2004. Customers appear to be managing inventories prudently, even in the face of supply-demand constraints."
Semiconductor sales were up in all regions except Europe, which saw sales in May drop to $3.18bn, compared with $3.22bn the previous month. The strongest growth came in the Asia-Pacific region, which rose from $6.9bn to $7.2bn.
"From a PC point of view, the market is not really up, although it is in line with expectations for this time of year," said Les Billing, managing director of Microtronica.
"It's not surprising that China is doing so well, because it is a new market, and a massive one at that, whereas much of Europe is now mature. Also, the second quarter is typically a much weaker quarter in the UK, and thanks to holidays, there are fewer selling days."
The SIA added that overall factory use continued to grow, from 92 per cent in Q4 2003 to 94 per cent in Q1 2004. For leading-edge manufacturers - makers of chips measuring 0.16 micron and less - capacity use rates are currently at 99 per cent.
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