Corporate spending is helping to drive a surge in demand for chips, with worldwide semiconductor sales rising to $16.2bn in March - up by 4.4 per cent from the $15.5bn reported in February and a 32.3 per cent jump since March 2003.
According to the Semiconductor Industry Association (SIA), global sales grew to $48.8bn in the first quarter of 2004, compared with $36.4bn in Q1 2003. Sales for Q1 2004 were also better than the $48.1bn recorded for Q4 2003. The SIA said this is surprising as Q1 is usually a seasonally weak quarter, while Q4 is the strongest.
"The strong sales in the first quarter are very encouraging," said George Scalise, president of the SIA. "Based on these strong results, it now appears likely that growth for 2004 will exceed 20 per cent. One of the leading drivers of sales was the continued growth in corporate spending on IT products.
"Corporate spending on IT software and hardware increased by 11.5 per cent in Q1, the fourth successive quarter of strong growth and the third straight quarter of double-digit growth. The fundamentals are in place for continued robust growth in chip sales until the end of the year."
Reflecting the return of corporate spending, in March sales of microprocessors and DRam showed solid sequential growth of 5.3 per cent and 5.9 per cent respectively.
Les Billing, managing director of Microtronica, agreed that things are looking up.
"Q1 was a strong quarter with both volumes and sales value up. We were selling a lot more in the first quarter than we were previously, but it remains to be seen what will happen in Q2, because that is a seasonally slow quarter for system builders.
"Things are slower than Q1 at the moment, but that is to be expected," he said.
"Sales have been helped by corporates being forced to renew their servers and PCs, many of which are up to five years old. A lot of corporates are still based on the NT operating system, but with support finally due to be withdrawn by Microsoft towards the end of the year, they have to do something."
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