"We expect sales of personal computers, communications products and a variety of hand-held devices, including newly introduced digital audio products, will accelerate demand for a broad range of semiconductors leading to a return to sequential growth for the industry in the December Quarter," says SIA president George Scalise.

From its beginning in the 1950s, the semiconductor industry has been characterized by a four-year cycle, sporadically modified by unexpected economic factors. The semiconductor industry has grown at a compound annual growth rate (CAGR) of 17 percent over the past 40 years.

A midyear report issued last September painted a dim picture for the annual cycle, however. In July alone, the SIA reports, sales only came to $10.86 billion, a decrease of 37.2 percent from $17.29 billion a year ago. On a month-to-month basis, July sales were 6.1 percent below the June, 2001, level of $11.57 billion.

"The reduced sales level was a consequence of the slow economic activity in the world's major economies combined with the excess inventories in the information technology market," Scalise says.

The SIA's Global Sales Report (GSR) is a three-month moving average of sales activity. The GSR is tabulated by the World Semiconductor Trade Statistics (WSTS) organization, which represents approximately 66 companies. The moving average is a mathematical smoothing technique that mitigates variations due to companies' monthly financial calendars.-P.B.