Chip sales continue recovery in October with 5.1 percent growth

Worldwide sales of semiconductor chips rose to $21.7 billion in October. That’s 5.1 percent higher than a month earlier, according to the Semiconductor Industry Association trade group.

The growth shows that the chip industry, a bellwether for the overall economy, is still on the mend heading into the holiday season. But sales for October are still 3.5 percent below the $22.5 billion reported a year ago. For the first 10 months of the year, chip sales are $180 billion, down 16.6 percent from $215.8 billion a year ago. The sales numbers are a three-month moving average.

“October is historically a strong month for the semiconductor industry, as electronic equipment manufacturers ramp production for the holiday season. Inventory management throughout the supply chain has been very tight, and this may extend the fourth-quarter build season by a few weeks,” said George Scalise, president of the SIA.

The improving chip sales reflect a recovery of the overall global economy, Scalise said. October sales showed improvements in all geographic regions, with Europe showing the biggest improvement with sales up 7.5 percent over September.

Overall, chip sales are expected to fall 11.6 percent to $219.7 billion in 2009 compared to 2008. That’s lower than previous predictions of a 21 percent decline.

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