Global chip sales rose in May, semiconductor group says

IDG News Service - Global semiconductor sales rose in May, mainly as a result of a blistering mobile phone market, the Semiconductor Industry Association said Saturday.

Chip sales rose to $18.05 billion in May, up 4% from $17.34 billion during the same month last year, the SIA said. Strong monthly sales growth should help pace overall growth for the worldwide chip industry this year. A number of market researchers and organizations like the SIA have boosted their full-year forecasts for the chip industry in recent months.

Last month, the SIA forecast that the global chip industry would reach record sales of $226 billion this year, up 6% from last year. It had previously predicted no growth.

Unit sales of cell phones have continued to outpace earlier forecasts, contributing to growth in sales of semiconductor products such as digital signal processors and analog chips, George Scalise, president of the SIA, said in a statement.

However, slumping prices for dynamic RAM chips dragged down the sector in May. Global chip sales fell by half a percentage point in May compared with April sales of $18.14 billion, the second consecutive monthly decline caused by falling DRAM prices.

The May-June time frame is normally among the weakest for DRAM because of a lull in the PC industry as companies begin planning for back-to-school and holiday sales for the second half of the year.

On the DRAM spot market, prices of the most widely used chips, 256Mbit DDR (double data rate) DRAM that run at 400 MHz, tumbled to their lowest price of the year on May 23, at $2.25 per chip, compared with $4.04 at the start of the year, according to DRAMeXchange, an online clearinghouse for the chips. The bad news for computer buyers is that the chips had rebounded nearly 8% to $2.42 by early today, and many people in the industry expect prices to continue to rise in the second half of the year.

"We feel that prices bottomed in June and will bounce back strongly," said Albert Lin, a vice president at DRAM maker ProMOS Technologies Inc. in Taiwan. "I still think this will be a profitable year for DRAM," he added.