A 4.6% downturn in first quarter sales will lead to an overall decline in world-wide chip revenue this year if sales don’t pick up in the third and fourth quarters, according to a report by the Semiconductor Industry Association (SIA), San Jose, California. It predicts chips sales will climb to $154bn this year, up 6.7% from last year’s $144.4bn. By 1999 SIA predicts world-wide sales will reach $234.5bn – a 19.1% growth. It blames falling DRAM prices for the overall decline and says if DRAM were not included in the calculations the industry’s global growth rate would be 10.2% for 1996. It points to sluggish sales of PCs around Christmas time for an oversupply and declining price of DRAMs. DRAM sales are expected to decline 2.3% this year to $39.8bn and fall another 0.3% in 1997, but rebound in 1998. The report also blamed the weak Japanese Yen and European currencies for reducing the world-wide growth rate. North and South America will remain the largest chip market with sales growing by 7.8% this year to $50.6bn and 19.1% to $76.1bn in 1999. Japan will record a marginal increase sales this year but accelerate to grow 15.8% by 1999 to $57bn. Asia-Pacific is the fastest growing market and will grow 8.9% to $32.1bn this year and 23.3% by 1999 to $53.4bn. European sales will increase 11.7% this year to $31.5bn, growing 18.7% by 1999 to $47.8bn. The Americas currently account for one- third of all sales, Japan 26%, Asia-Pacific 20.9% Europe 20.5%.
