Chip sales rallied on the fourth quarter of 1998, according to figures just released by the to Semiconductor Industry Association. World semiconductor sales reached $11.31bn in December, 10.5% up on third quarter figures and surpassing the forecast expectations of modest growth. The rally brought the chip industry to a year-end total of $125.61bn, still a decrease of 8.3% from 1997’s $137.20bn, but better, says the SIA, than the 10% decline it had been expecting. The rally was attributed to 1998’s capital spending cutbacks taking hold, resulting in supply coming into better balance with demand. Asia-Pacific markets showed recovery signs, and PC demand strengthened due to price cuts. December was the only month throughout 1998 to show a year- on-year growth, with Asia-Pacific sales up 2.4% from December 1997, when the financial crisis had not yet begun to take effect. This stabilization bodes well for favorable sales in 1999 said SAI president George Scalise. European sales climbed 5% compared with last December, but US sales declined 4% and Japanese sales 8.3%. Even the Japanese decline looks favorable when compared with the 30% drop reported in August. December is traditionally a weaker month for chip sales due to the shorter working month, but totals for the month remained relatively unchanged from November, dipping 0.7%.
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