Chip Group Expects 1.8% Dip in Global Sales

Global sales of computer chips will fall 1.8% to $134.6 billion in 1998 largely because of Asia’s economic troubles, the Semiconductor Industry Assn. said. In addition to Asia, the industry is facing falling prices for semiconductor products, a glut of memory chips and slowing demand for personal computers. The SIA and other forecasters had expected chip sales to grow in 1998 after a lackluster 1997. But the industry had a huge sales drop in the first quarter because of weak Asian currencies, slowing purchases by personal computer makers and falling component prices. First-quarter revenue declined 10.2% in the Americas, 4.9% in Europe, 11.5% in Japan and 9.7% in Asia, according to the group. Sales have improved in the second quarter, but not fast enough to offset the reduced orders in the previous quarter, the SIA said. Still, the group expects strong demand for access to the Internet to get sales growing again by the second half of 1998 as well as in the next few years.