Semiconductor Sales Jumped More Than 50% in First Half of 2010

Semiconductor Sales Jumped More Than 50% in First Half of 2010
Semiconductor Sales Jumped More Than 50% in First Half of 2010

Semiconductor sales worldwide rose more than 50%

in the first half of the year, the Semiconductor Industry Association announced Monday, but investors shouldn't assume that implies a slam dunk for the second half.

During the first six months of 2010, global chip sales climbed to $144.6 billion and were up by a healthy margin compared with the same time last year, when the industry got socked with an economic downturn. And for the month of June, the industry posted $24.9 billion in sales, up a slight 0.5% over the previous month.

"Sales in the first half of 2010 were exceptionally robust, driven by strong demand from a broad range of end markets," said SIA President Brian Toohey in a statement.

Consumers, Jobs and Malaise

Despite the strong first-half performance, the SIA is anticipating growth rates will slow in the second half, with full-year projections of 28.4% growth. Part of the reason for that more moderate pace is that the first half benefited from a relatively easy comparison against lackluster figures from the first half of 2009, when the industry suffered a significant slowdown.

But the SIA also warned that the industry could see its performance in the second half suffer due to macroeconomic factors like weak consumer confidence, anemic job growth or overall economic malaise.

Despite the SIA's cautious outlook, Intel (INTC) gave investors a bullish forecast when it posted its blowout second-quarter report recently. The chip giant said it expects sales of $11.2 billion to $12 billion in the third quarter, higher than the $10.9 billion that Wall Street analysts had penciled in. And in the fourth quarter, Intel expects to begin reaping the benefits from its next-generation chip, code-named Sandy Bridge.

Rival Advanced Micro Devices (AMD) is predicting gains as well. In its second-quarter announcement, AMD said it expects its revenue to rise seasonally in the third quarter.