Chip sales climb 23% in fourth quarter

By Ron Day
Bloomberg News Service

SAN JOSE, Calif. — Worldwide semiconductor sales rose 23 percent in last year's fourth quarter and will grow in 2003, boosted by demand for mobile phones, according to the Semiconductor Industry Association.

Sales increased to $37.6 billion from the same period a year earlier. For 2002, sales rose 1.3 percent to $140.7 billion, the group said in a statement.

Revenue this year will jump 20 percent, to $169.3 billion, as companies resume spending on computers, the association said.

Chip sales fell 32 percent in 2001, the industry's steepest decline, and in July had their first year-on-year increase since February 2001. Wireless telephone sales were spurred by growth in China, where about 5 million new subscribers are added each month, the group said.

"We think 2003 will be the year of growth, after 2002 was the recovery year," George Scalise, the association's president, said on a conference call.

Sales of digital signal processors, the chips that power many mobile phones and other consumer electronics, grew 14 percent in 2002, to $4.9 billion, from $4.3 billion in 2001, according to the association. Texas Instruments Inc. is the world's largest maker of those kinds of semiconductors.

Personal computers are the biggest users of chips, accounting for about 30 percent of sales, according to the association. Spending by corporations on computer hardware will increase this year, Scalise said, adding that consumer purchases of devices such as DVD players and digital cameras helped boost sales last year.

The Philadelphia Semiconductor Index, which includes Texas Instruments and 16 other companies, fell 1.17 to 270.56 at 4 p.m. EST.