Chip sales rise 13% in Q1

Revenue from processor sales increased in the first quarter of 2003 as compared to last year's first quarter, fuelling hopes that the semiconductor market is growing at a steady rate after two off years.

Chip suppliers reported revenue of $36.4bn (£23bn) in the first quarter, up 13% from last year's first quarter, said the Semiconductor Industry Association (SIA). Sales also grew 2.6% sequentially in March compared to February.

The industry's revenue grew only 1.3% in 2002, and lost substantial ground in 2001.

Despite the trend, the SIA continues to predict double-digit revenue growth in semiconductor sales for 2003, citing strong sales among consumers and the growth of wireless networking technologies.
 
The SIA also anticipates that a large number of companies will replace their PCs with new ones later in the year.

Corporations have historically replaced their PCs every three years to take advantage of new technology, but the last wholesale PC upgrade cycle occurred in 1999 amid the Y2K frenzy.

Asia-Pacific, which excludes Japan, continues to be a hot spot for semiconductor sales, generating 36% of the world's chip revenue.

The region is home to many PC and component manufacturers, which increased their spending on semiconductors by 17.2% in the first quarter.

Japan itself is a large enough market to occupy second place with 23% of all semiconductor purchases revenue.