Trade Group Expects Flat Chip Sales In 2005 After Torrid Growth in '04; Would End A 3-Year Run-Up; SIA says chipmakers remain saddled with inventory, as PC, cell phone sales slow.(INTERNET & TECHNOLOGY)

Byline: JAMES DETAR

Chip sales will fall flat this year after a 2004 that proved to be one of the best years ever, the industry's biggest trade group said on Monday.

The Semiconductor Industry Association, in its latest update, didn't change an earlier forecast of flat chip sales this year.

But SIA President George Scalise says he personally believes the outlook is a tad conservative.

"We see the possibility it could be up a couple of points," Scalise said in an interview.

In any case, 2005 will be a far cry from 2004. The SIA confirmed its earlier forecast that worldwide semiconductor sales jumped 28% last year to a record $213 billion. That's the highest percentage increase in at least 10 years other than a 37% hike in the 2000 bubble year. In mid-2003, the SIA forecast a 20% increase for 2004.

In late 2003 and early 2004, PC sales rose faster than expected, as did sales of some consumer electronics products, including cell phones. A slowdown in the latter half of the year left chipmakers with a glut of inventory.