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Thursday, 2 May, 2002, 18:27 GMT 19:27 UK
Sales surge raises hopes for chipmakers
Infineon semiconductors
Semiconductor sales are set to grow this year
Sales of semiconductors have increased at their fastest rate in 16 years, raising hopes that the industry's slump is over.

Worldwide chip sales were 7.2% higher last month than in February the Semiconductor Industry Association (SIA) said.

The figure, the biggest monthly rise since April 1986, supported upbeat forecasts from major manufacturers, and was welcomed by analysts.

"We believe the semiconductor slump is over," said Schroder Salomon Smith Barney analyst Navdeep Sheera.

Survival drive

The depth of the slump was revealed in long-term figures in Thursday's report, showing that semiconductor sales last month were one quarter below those in March.

February 2002 sales were more than one third below those of a year before.

The industry has been hit hard by weak demand for computers, and the disappointingly slow roll-out of new mobile phone technologies

Manufacturers have mothballed factories and laid off staff, and sought mergers with competitors, in a bid to see out the slowdown.

A deal between second ranking Micron and third ranking Hynix collapsed on Thursday.

But recent figures from chipmakers such as Infineon have raised hopes of recovery, with economic revival in place in many countries, and firms poised to renew computer systems last updated in the 1999 rush to beat the millennium bug.

Growth ahead

March's sales rise was led by a record increase in trade in so-called Dram chips used to provide operating memory in computers, the SIA said.

"The Dram sales are a result of increased demand and price increases from the depressed levels of 2001," SIA president George Scalise said.

He forecast that the semiconductor industry overall would end the year showing "modest but sustained overall growth".

See also:

02 May 02 | Business
Micron abandons Hynix buyout talks
02 Jan 02 | Business
Chip makers hike prices
18 Dec 01 | Business
Toshiba backs out of memory market
06 Dec 01 | Business
When the chips are down
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