Chip Sales Increase in Numbers, Profits Aren't

It’s no secret that chip sales have been hurting in this economy. In fact, semiconductor sales fell last year for this first time since the tech bubble burst in 2001. However, the newest numbers out seem to show a reasonable rebound. Global chip sales in Q3 rose 19.7% over Q2 to 61.9 billion, according to the Semiconductor Industry Association (SIA). The bad news is that sales were still over 10% lower than Q3 last year.

To a degree, this sort of increase is expected as demand ramps up approaching the holidays, but SIA president, George Scalise, has called the results “above expectations”. He pointed out that sales of PCs and cell phones have been running ahead of predictions. These devices are the largest consumers of semiconductors.

Positive signs continue to accumulate for the chip market. In addition to the just released numbers, previous values indicate that September actually saw a year-over-year gain of 7.8% in American sales. SIA is raising their projections for total 2009 sales. Is this a premature decision, or not?  We’ll find out in a few months.