Semiconductor Sales for March Up a Whopping 58.3 Percent from March 2009

More proof that the global recession is over for tech: A report from the Semiconductor Industry Association (SIA) shows that worldwide semiconductor sales rose to $23.1 billion in March, an increase of 4.6 percent from February, when sales hit $22 billion, and a whopping 58.3 percent from March 2009, when sales were $14.6 billion.

The report notes that the first quarter of 2009 marked the low point in semiconductor sales, due to the global economic recession. Sales for the first quarter of 2010 were $69.2 billion compared to $43.7 billion for the first quarter of 2009.

"Global sales of semiconductors set a new high for the month of March and were second only to the record sales reported in November 2007," said SIA President George Scalise in a statement. "Healthy demand from major end markets coupled with restocking to normal inventory levels contributed to strong first-quarter growth. While we expect that 2010 sales will continue to be strong, the year-on-year growth rate will moderate going forward, reflecting the industry recovery that began in the second half of 2009.

"Foundries and integrated device manufacturers are ramping production to bring supply into line with expected demand levels," Scalise added. "We do not expect to see near-term issues with either excess inventories or capacity due to strong unit demand in key end markets. Computing and communications, which together account for more than 60 percent of total demand for microchips, are seeing healthy unit growth. PC unit sales are projected to grow in the mid- to high-teens, and handset growth is expected to be in the high single-digit range."

Scalise said rebounding sales of PCs and smartphones, especially in the enterprise sector, and especially in Asia, are helping to drive the increase.

"We remain cautiously optimistic that global sales will show double-digit growth in 2010," he said.

Last month chipmaker Intel (News - Alert) released its first quarter results, saying it was the 'best quarter ever.' The chipmaker earned net income of $2.4 billion - a massive jump from the $629 million it reported in 1Q 2009. Revenues jumped 44 percent to $10.3 billion, ahead of analysts' forecast for $9.8 billion.

The report underscores what analysts and researchers have been saying for months: That the tech industry appears poised for a major rebound in 2010.

More specifically the firm's 1Q report shows that corporate spending on personal computers is increasing. In particular companies are starting to invest again in laptops. This is a strong indicator of a turnaround for tech, since personal computers are typically the last thing companies invest in following a budget freeze. The general reason companies are starting to invest in technology again is because it is often less expensive than maintaining aging computers and systems.

There have been numerous reports in the past two months which indicate that the tech industry is starting to rebound from the global economic recession. A recent study by Forrester (News - Alert) Research, 'US and Global IT Market Outlook: Q1 2010,' confirms the trend. 'The tech recovery has started in the US and around the world,' the report states, adding that in the fourth quarter of 2009 'IT market indicators showed an end to declines, setting the stage for stronger growth in 2010.' The report predicts that the US IT market will grow by 8.4 percent, to $550 billion, in 2010, while the global IT market in US dollars will grow by 7.7 percent to $1.6 trillion.