A modest recovery in the chip industry is expected this year after a 43 per cent drop in sales in December.
The Semiconductor Industry Association (SIA), which represents the US chip industry, said that global 2001 sales fell to £97bn ($139bn), a drop of 32 per cent on record sales in 2000 of £144bn ($205bn).
December sales were £7.1bn ($10.2bn), compared with £12.5bn ($17.9) in the same period a year previously.
Despite the massive year-on-year drop, the SIA was upbeat and maintained that there were signs of recovery in the last quarter that should continue into the new year.
"Product comparisons show a number of improving trends in the fourth quarter," said George Scalise, SIA president. "Key demand drivers - wireless handsets and personal computers - bottomed out in the third quarter and recorded double-digit increases in the fourth quarter."
The slowdown in mobile phone and PC sales, the first since 1985, contributed to the chip market's worst ever decline in 2001.
Scalise was encouraged by increases in sales outside Japan which indicate that demand for semiconductors in the major economies is picking up.
In Japan, recessionary pressures pulled demand down 11.8 per cent for the quarter.
"We expect 'flat' to 'slightly up' sales in the first quarter of 2002, another indicator of recovery since this is traditionally a seasonally 'flat' to 'down' quarter," said Scalise.
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