AMSTERDAM, Dec 30: Growth in global chip sales slowed to 1.3 per cent in November from October, the industry’s main research group said on Monday, and investors are bracing for even weaker trading ahead.

Total November sales were $12.68 billion, but growth slowed from a 1.8 per cent monthly rise in October, the World Semiconductor Trade Statistics (WSTS) group said in its monthly report.

Chip sales traditionally accelerate in the run-up to the end-of-year holidays on the back of strong demand by electronics manufacturers for goods from computers and cellphones to toys and shavers.

This year, however, demand from businesses and consumers for the two categories which consume most of the world’s chips, computers and mobile phones, have remained slack.

Annually, compared with the same month of November a year earlier, global sales climbed 19.6 per cent, slightly slower than the 19.9 per cent growth measured in October. Comparisons with the same months last year look favourable, but only because the semiconductor industry then experienced its worst decline ever.

Chip sales growth could slow further if early indications are correct that consumers have become more cautious since a relatively buoyant Thanksgiving in late November.

The US retail sector now expects its worst end-of-year holiday sales season in 30 years as a sluggish economy, a weak job market and the threat of war with Iraq dampen consumer confidence and spending.

“The WSTS numbers for November are historical data. Key is what’s happened in December. We’ve seen weak retail reports this month, and just before Christmas (US chip maker) Cypress warned about weak wireless chip sales,” said one London-based analyst at a major investment bank.

The European FTSE semiconductor index, 32 per cent lower in December in anticipation of yet another delay of the sector’s recovery, was down 0.2 per cent at 164.32 points on Monday, roughly in line with a flat DJ Stoxx European technology index.

Regional differences showed resilience of European chip sales while the Americas and Japan hovered around zero growth and Asia Pacific was in line with the global average.

Asia Pacific ex-Japan, the region where most chips are manufactured, rose 1.3 per cent in November from October to $4.62 billion, slightly faster than the one per cent growth in October.

In Europe, where the chip sector is focused on consumer electronics, cars, mobile phones and other categories which are not exposed to the depressed computer sector, monthly sales grew 5.8 per cent to $2.60 billion, down slightly from 6.2 per cent in October.

The US Semiconductor Trade Association (SIA) singled out wireless chips as the driving force behind the sales growth in November. “The wireless sector continues to be the strongest single market,” it said in a statement.

The SIA issued no forecast for December.

SIA and its European equivalent ESIA publish the monthly sales statistics on behalf of the WSTS, using three-month moving averages. In the Americas and Japan, November sales declined by 0.8 per cent and 0.6 per cent respectively compared with October, down from 0.5 and 0.8 per cent growth a month earlier.—Reuters