Global chip sales up strongly before Christmas

AMSTERDAM (Reuters) - Global sales of semiconductors have risen strongly ahead of the end-of-year shopping season, driven by booming demand for mobile phones, computers and electronic gadgets for the living room, a survey said on Monday.

Global September revenues, averaged out over three months to smoothen monthly events, climbed 5.6 percent to US$19.6 billion in September from a year earlier. Revenues were up 5.2 percent from August, according to the World SemiconductorTrade Statistics (WSTS) association.

"The market drivers were personal computers, the communication segment with mobile phones, and digital consumer, as Christmas this year will be dominated by digital devices such as MP3 players, digital TV and DVD recorders," said Patrice Vaslot, vice-chairman for Europe at the WSTS.

The association groups companies representing 85 percent of the world's chip market.

Analysts from investment bank J.P. Morgan said September chip revenues had come in ahead of the normal seasonal increase after the summer, putting the industry on track for at least 8 percent sales growth in 2005 from the record year of 2004, when revenues jumped 28 percent to US$213 billion.

"If we have normal seasonality from this point, it would result in close to 9 percent revenue growth," analysts Uche Orji and Jeroen Bos in London said in a note.

Higher revenues would be mostly driven by higher unit growth -- more chips sold -- and a modest 2 percent increase in prices.

To September, the global chip market has grown 6.1 percent this year, the WSTS numbers showed. Last week, the WSTS forecast 6.6 percent revenue growth this year.

Both the semiconductor industry and analysts point out that the chips sold in September have been ordered on anticipated, and not yet realised, demand around Thanksgiving and Christmas for flat TVs, hard disk recorders and the latest mobile phones.

"This indicates that manufacturers of devices expect a strong end of the year. Let's hope they are right. The digital consumer is really expected to be the main pillar of Christmas this year," Vaslot said.