WSTS cuts $1 bn in chip sales, says analyst

LONDON – In the global chip sales figures for November recently posted by World Semiconductor Trade Statistics (WSTS), the organization made downward revisions to all the sales numbers of the previous months of 2010, according to analyst Mike Cowan.

The net result has been to strip $991 million in value out of the year's sales and this contributed to Cowan's reduced forecast for December and the full year's chip sales. The move follows a similar move the previous month where WSTS lost $391.5 million from the "actual" sales figure for September 2010 reducing it to $28.981 billion from $29.372 billion.

WSTS is a non-profit organization of 64 chip companies, which it estimates represent more than 70 percent of the world semiconductor market. WSTS has yet to provide any comment as to why the global numbers required correction, but a significant reduction, especially weighted towards the second-half of 2010 can affect market sentiment and estimates for 2011.

Cowan now sees December's actual global chip sales coming in at $27.29 billion, which yields a three-month average sales figure of $25.44 billion. It would also produce an annual global chip sales figure of $299.1 billion representing an annual sales growth of 32.2 percent.

For WSTS to make a minor correction to the immediately preceding month is quite usual. But for the organization to systematically strip sales out of the whole year is unusual and according to Cowan to lose $991 million "is quite substantial at least relative to past historical experience." It is also notable that "September's sales number took strong back-to-back hits," said Cowan, referring to the fact that almost $500 million was removed from September, over two months.

One reason that could explain the systematic stripping of sales is that WSTS has received corrected figures from one or more of its members, or a multiplier that represents the significance of members' sales to a regional market has been changed.