SAN JOSE - Worldwide sales of semiconductors reached a record $213 billion in 2004, a year-on-year increase of 28% from 2003, the Semiconductor Industry Association reported today. December chip sales declined 3.5% sequentially to $18.4 billion, in line with historical seasonality.

It was the first time since 2000 that global chip sales surpassed $200 billion.

December sales were 14.6% higher than December 2003. Fourth-quarter sales, at $55.1 billion, declined 0.8% sequentially.

"Strong demand from a very broad spectrum of end-markets propelled worldwide semiconductor sales to a record," said SIA president George Scalise. "The industry's growth over the past three years is even more remarkable when viewed in a broader perspective. Worldwide sales of semiconductors fell to $139 billion in 2001 following the collapse of the dot-com boom, the 9/11 terrorist attacks and a mild economic downturn.

"Fears that high gasoline prices would seriously dampen sales of consumer electronics during the holiday season did not materialize," Scalise said. "A moderation of gas prices coupled with good economic growth appears to have bolstered consumer confidence, an increasingly important consideration for the semiconductor industry, as purchases by individual consumers now account for more than half of all chip sales."

Scalise noted that very strong year-on-year growth during the first half of 2004 drove worldwide sales growth at a faster rate than the earlier SIA forecast of 19% growth. Global chip sales grew 36.5% year-on-year during the first half, 21% during the second.

SIA forecast global sales will decline 4 to 6% sequentially this quarter in part due to supply chain inventory reduction and consumer spending patterns.

SIA projected flat sales for the year.