Chip sales still set to rebound after dismal January

While chip sales were poor in January, the stage is still set for a rebound this year.

World chip sales are expected to hit $22.7 billion in January, compared to $23.8 billion in December. When seasonally adjusted, this points to a 1-2 percent drop, with a significant 15-16 percent fall year-on-year, according to figures from Carnegie.

There are some mitigating factors. According to Bruce Diesen at Carnegie, with China celebrating an early New Year it had been expected that sales would increase in December, in turn hurting January figures.

This means that the situation is likely to change going into February as sales ramp up again, despite the lingering effects of the flooding in Thailand on prices.

As analysts at Future Horizons have previously pointed out, the chip industry is in a good condition to jump back into form, once it has exited the January doldrums.  Good results for TSMC in January has been one indication that, barring further unforeseen catastrophes like last year, the industry should roar into action soon enough.

The strength of the PC market will remain a concern. According to Carnegie, US spending at electronics retailers fell by one percent over January. PC imports were poor in December, and with the ensuing drop in tech spending there is likely to be another drop in imports for January.