Demand for memory and wireless communications chips drove a 40 per cent increase in global semiconductor sales in June, the Semiconductor Industry Association (SIA) said yesterday.

The year-on-year sales spike, which brought in $17.8 billion for the month, keeps the industry on pace for reporting record sales for the year although sales growth will not be as strong in the second-half of 2004, SIA said. The industry group predicted that global semiconductor sales for 2004 will total $214 billion.

Second-quarter sales reached $53.5 billion, up 9.5 per cent from the $48.8 billion reported for the first three months of the year.

The industry continued to benefit from strong demand for DRAM (dynamic RAM), which saw a 100-per cent year-on-year increase in the second quarter, thanks in part to robust PC sales.

DRAM prices remained firm during June, due to short supplies, but are expected to come down somewhat as supply increases thanks to new production capacity and higher production processes expected later in the year.

Chip manufacturers are moving to smaller die sizes that allow them to put more chips on a wafer, increasing production. This supply increase should foster more competitive pricing, SIA said.

Chips for wireless communications, such as digital signal processors and optoelectronics devices, also drove sales, reflecting higher demand for digital cameras and camera phones, SIA said.

The Asia-Pacific region posted the strongest sales growth in June, up 61 per cent over last year to $7.6 billion, while the Americas followed with 30 per cent growth to $3.3 billion. Europe increased sales by 29 per cent during the month to $3.1 billion, while Japan reported growth of 26.3 per cent to $3.8 billion.