‘04 Chip Sales Up 23%, Study Says

Worldwide semiconductor sales for 2004 rose 23% to $218 billion, less than forecast, as builders of personal computers and mobile phones faced a glut in inventory, market researcher Gartner Inc. said.

Gartner analysts, who in August predicted a 27% increase to $226 billion, said chip orders had taken a “sudden downturn.”

Intel Corp., again ranked as the world’s biggest chip maker, slowed production because of the oversupply, as did other manufacturers, Gartner said. The researchers had expected that rising demand for electronics would offset buildups of inventories.

“The market is really, really sensitive to inventory levels, and everyone has been cautious,” said Gerald Van Hoy, a Gartner analyst based in San Jose.

Samsung Electronics Co. remained the second-biggest semiconductor maker, Gartner said. Samsung’s revenue surged 49% on sales of microprocessors used in digital cameras and mobile phones. Santa Clara, Calif.-based Intel’s market share shrank to 13.7% from 15.3%, and South Korea-based Samsung’s share widened to 7% from 5.9%.

Shares of Intel rose 79 cents to $23.49 on Nasdaq.