A 1.5 percent dip in chip sales in June, down slightly from last year, probably doesn't signal laggard growth for electronics in the second half, analysts said. In fact, recovery from the Japan earthquake and a boost in auto sales, as well as new products for the December holidays should spark new demand.
The Semiconductor Industry Association Monday reported June sales fell to $24.7 billion from May's $25 billion, with especially poor demand in Japan. For the first half of 2011, chip sales rose 3.7 percent and the industry trade group predicted a full-year growth of 5.4 percent. That would still be far below last year's 32 percent jump to nearly $300 billion after a dismal 2009.
"June is a squirrely month," said chip analyst Dan Scovel of Tokeneke Research. Since 1991, nine of the past 20 Junes have been down slightly, he said.
Reasons include long summer holidays in Europe as well as slow ramp-up of products for the holidays, ranging from new laptops from Dell, Acer and Hewlett-Packard, to smartphones from Apple and Motorola Mobility, to electronic toys. With the recovery of the automobile industry, which consumes more chips than ever to govern smart systems, as well as new products, Scovel and other analysts said the outlook should remain positive.
Also, Japan's recovery from the March earthquake and tsunami should gain steam in the second half, Scovel predicted. The SIA reported Japan chip sales slid nearly 12 percent from June 2010.
The biggest U.S. chip makers, headed by Intel and Texas Instruments, as well as IBM, the world's biggest computer services company, reported solid second-quarter gains. IBM has a vast in-house chip operation.
Semiconductor stocks have dipped about 14 percent in the second quarter as measured by the 30 chip companies comprising the Philadelphia Stock Exchange Semiconductor Index. The SOX Index Monday dipped slightly Monday to 386.93. Its 52-week high was 394.31.