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Strong chip sales suggest more PC growth

Global shipments up in preparation for Christmas

Global chip sales soared in August, indicating that makers of electronic devices such as PCs, iPods and mobile phones expect a strong holiday season this year.

Worldwide chip sales rose 4.5 percent year-on-year to $21.6bn in August, the SIA (Semiconductor Industry Association) has reported.

The increase is better than historical norms, according to John Pitzer, chip industry analyst at Credit Suisse Securities. August marks the third month in a row that chip sales have been higher than seasonal norms.

August is the month electronics manufacturers buy most of the chips they need to prepare for the holiday season, the SIA said, indicating companies expect strong Christmas sales. Rising PC demand is also boosting overall chip sales because about 40 percent of all chips go into PCs. Other goods are helping global chip sales by increasing the number of chips used, such as automobile engines.

Global PC shipments grew 12.5 percent year-on-year in the second quarter, according to market researcher IDC, with the Asia/Pacific region returning the fastest growth at more than 20 percent. The brisk quarterly growth prompted Gartner to forecast PC sales for 2007 to increase 12.3 percent over last year, led by sales in emerging markets as well as rising laptop PC sales in developed countries.

A spike in prices for NAND flash memory chips, which are used to store songs, video clips and other data in devices ranging from iPods to digital cameras and mobile phones, also aided chip sales growth in August, the SIA said. NAND flash memory prices were up 48 percent compared to a year ago and 19 percent higher than July.


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