SAN JOSE -- For the fourth consecutive month, worldwide chip sales increased in October, according to a new report issued today by the Semiconductor Industry Association. Chip sales grew 2.5% sequentially to $10.43 billion in October from $10.18 billion in September, based on a three-month moving average, said the SIA, which continues to forecast the start of a semiconductor recovery in the fourth quarter.

On a year-to-year basis, October's revenues were 44.1% below $18.65 billion in the same month last year.

But the San Jose-based U.S. trade group remains optimistic about a modest recovery, which it says is now starting. "The October sales are another indication that the industry is on track to achieve our forecast of 4.7% growth in the fourth quarter," said George Scalise, president of the SIA. "All geographic markets with the exception of Japan had sales increases in the period led by the United States which was up 5.1%.

"Increases in unit demand for a broad cross section of products are being driven by personal computers, cell phones and related communication products, along with a variety of consumer devices," Scalise added. "The worldwide market for semiconductors in 2001 is expected to decline 31% due to excessive inventories and price pressure on a wide range of products. However, recent data indicates inventory is now largely in balance and prices are rebounding in some product categories."

Last month, the SIA issued its annual autumn forecast which calls for the industry turnaround beginning in the fourth quarter of this year and 6.3% growth in worldwide chip sales in 2002 from $141 billion in 2001. The markets will continue to gain momentum and sales will increase 21% in 2003 followed by another 21% in 2004 reaching $218 billion worldwide, the SIA forecast said (see Nov. 7 story).

The October sales report shows semiconductor sales in the Asia Pacific region growing sequentially by 4.0% in October to $3.37 billion from $3.24 billion, based on the SIA's three-month moving average. Chip sales in the Asia Pacific market were 26.7% lower than $4.60 billion in October 2000, the report said.

Semiconductor sales in the Americas were up 3.1% to $2.51 billion in October vs. $2.44 billion in September, said the SIA. On a year-to-year basis, Americas' chip sales were down 57.4% from $5.90 billion in October 2000.

Chip revenues in Japan dropped 2.6% sequentially to $2.34 billion in October from $2.41 in September, the SIA report said. Japan's semiconductor sales were 46.1% lower than $4.35 billion in October 2000.

In Europe, semiconductor sales grew 5.1% to 2.20 billion in October compared to $2.09 billion in September, but revenues were 46.1% lower than $3.79 billion in October 2000, according to the monthly sales report.