SAN JOSE -- Worldwide chip sales sequentially slipped 4% to $10.18 billion in December from $10.60 billion in November, according to a new report released by the Semiconductor Industry Association here.

The decline followed two straight months of sequential increases--in October (2.5%) and November (1.6%)--but the SIA said December's drop was "consistent with seasonal patterns" in the recent years.

But even with December's drop, fourth-quarter semiconductor sales were essentially flat with third-quarter revenues worldwide, ending three straight quarters of double digit declines in 2001, according to the U.S. trade group, which released its report on Sunday. Using a three-month moving average, the SIA estimated that worldwide chip sales totaled $30.54 billion in Q4 vs. $30.57 billion in Q3.

"Product comparisons show a number of improving trends in the fourth quarter," said George Scalise, president of the SIA. "Key demand drivers, wireless handsets and personal computers, bottomed out in the third quarter and recorded double-digit increases in the fourth quarter. Semiconductors used in these products, including microprocessors, digital signal processors, and DRAMs, also registered double-digit gains."

The semiconductor market ended up with total revenues of $139 billion in 2001, according to the SIA, which bases its Global Sales Report on data collected by the World Semiconductor Trade Statistics (WSTS) group. That total is a couple billion dollars less than what the SIA had expected in November, when it predicted a 31% decline in 2001 to $141 billion from $204 billion in 2000. At the time, the San Jose-based trade group predicted that chip sales will rebound 6% to $150 billion in 2002 (see Nov. 7 story).

Semiconductor sales in all regions dropped in December compared to November: the Americas sequentially declined 1.2%; Europe fell 5.3%; Japan dropped 8.5%; and the Asia Pacific market slipped 2.2% from the prior month. Using a three-month moving average, the SIA said December chip sales in the Americas totaled $2.47 billion. Europe's chip sales were at $2.20 billion, in Japan $2.13 billion, and in Asia Pacific $3.39 billion, according to the SIA's new report.

SIA officials are not alarmed by December's drop. "Except for 1999, monthly semiconductor sales in December for the past six years have registered a decline just as we are seeing this year," Scalise said.

Japan's chip market continued to drag down the semiconductor sales total worldwide in the fourth quarter, according to the SIA, which said combined revenues from the Americas, Europe, and the Asia Pacific regions were sequentially 3.7% higher in Q4 from Q3 in 2001. Japan's Q4 chip sales were 11.8% lower than Q3, the trade group said.