Semiconductor Sales Growth Slows in December

Worldwide semiconductor sales growth slowed for the fourth straight month in December, and growth this year could be less than half of what’s expected, an industry group said.

December chip sales rose 22% from a year ago to $17.9 billion, the Semiconductor Industry Assn. said. That was down 2.1% from November.

Sales for all of 2000 rose to $204 billion, missing the SIA’s prediction of $205 billion.

Chip makers including Intel Corp. and Advanced Micro Devices Inc. cut their sales forecasts at the end of 2000, citing disappointing demand for personal computers and cell phones as U.S. economic growth wanes.

Semiconductor revenue growth this year could slip to 10%, less than half of the industry group’s projection for a 22% increase, said George Scalise, president of the San Jose-based SIA.

First-quarter sales are likely to fall compared with the fourth quarter, followed by a rebound late in the second quarter, he said. The SIA will revise its forecast in June, he said.

That scenario is in line with what many analysts are expecting, with sales stumbling as PC makers work through extra chip inventory they’ve already bought.

“We expect deceleration in industry growth rates to continue, given weak PC sales coupled with higher inventories of communications-related components,” Eric Rothdeutsch, an analyst with Robertson Stephens & Co., wrote in a report to clients.

Japan posted the fastest growth last year, with a 42% increase, the SIA report showed. Sales climbed 38% in Asia, and they rose 35% in the Americas and 33% in Europe.

Sales of flash-memory chips, which store data when devices are switched off, more than doubled in 2000 to $10.6 billion as demand for cell phones soared early in the year.

Computer-processor revenue rose 17% to $31.9 billion, the group said. Sales of dynamic random-access memory chips, the main memory chips in PCs, rose 40% to $28.9 billion. Programmable-chip sales climbed 88% to $5.5 billion.

Monthly figures from the association are three-month moving averages. To get December 2000 sales, the group tallies October, November and December and divides by three.

Intel shares have lost more than half of their value since their record high in August, as investors grow skittish about how long a recovery will take. Its shares closed off $1 at $34.69 on Nasdaq.

Micron Technology Inc., the biggest U.S. maker of computer-memory chips, have fallen 60% since trading at a 52-week high in July. Its shares fell $2.92 to close at $38.28 on the New York Stock Exchange.

Texas Instruments Inc., the biggest maker of cell-phone chips, fell $2.07 to close at $41.01. The shares have dropped 57% since its 52-week high in March.

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Chipped Away

Semiconductor stocks ended mostly lower Monday on the latest industry sales report. The stocks rebounded in January after last year’s plunge, but many still are half or less their 2000 peak prices.

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SOX index of 16 major semiconductor stocks, weekly closes and latest

Monday: 659.06

Source: Bloomberg News