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The Semiconductor Industry Association released its global sales report for September today.

“Worldwide sales of semiconductors in September once again achieved a new high as electronic equipment manufacturers geared up for the fourth-quarter holiday season,” said George Scalise, president of the Semiconductor Industry Association [SIA]. “Global chip sales rose to $21.4 billion, an increase of 9.3 percent from September 2005, and a 4.2 increase from the $20.5 billion reported in August 2006. Strong demand for consumer products, including cell phones, MP3 players, and personal computers were major drivers of increased chip sales.

While high-single digit growth would be considered solid for most industries, the report is negative for three reasons:

1. Most tech investors tend to hope for something higher.
2. The growth rate has slowed for two consecutive months.
3. Semiconductor companies continue to expand capacity at a much higher rate than sales, as we have noted before, and which the chart below illustrates.

semi demand

Source: Semiconductor Growth Still Not Good Enough - Here's Why