Welcome news, considering that back in June, SIA was calling for chip sales to fall 21 percent.

“The new forecast is brighter than our earlier projections, reflecting an improving global economy,” SIA President George Scalise said in a statement. “Unit sales of key demand drivers–including PCs and cell phones, which together account for about 60% of semiconductor demand–have been stronger than previously predicted. We remain cautiously optimistic for the longer term. The current forecast is closely tied to projections of continuing improvement in the worldwide economy.”

Third-quarter chip sales totaled $61.9 billion, down 10.1 percent from the same quarter last year, but up nearly 20 percent from the second quarter of 2009. No doubt about it, the market for chips is improving (see chart below; click to enlarge).

“Global semiconductor sales in the third quarter were above expectations,” SIA President George Scalise said in a statement. “September sales were in line with historical patterns, reflecting increased demand from end-users as they began the build for the holiday season.”

“Amid signs that we are in the early stages of recovery in the global economy,” Scalise added, “semiconductor sales continue to reflect normal seasonal patterns. Sales are running well ahead of the worst-case scenarios projected early in the year, and we are optimistic that total sales for 2009 will be better than our mid-year forecast.”

Sales are running well ahead of the worst-case scenarios? Well, I suppose any reassurance is a good one when your industry is down 10 percent year-over-year.

“Notwithstanding the slow recovery of demand from the enterprise sector, we are encouraged that industry momentum has turned positive following the steepest downturn in more than a decade,” said SIA President George Scalise.

Great news were it not for the fact that at $19.1 billion, August sales were down a horrific 16.1 percent year-over-year. Furthermore, for the first eight months of 2009, sales are at $133.8 billion–about 21.3 percent below this time last year.

So while it’s wonderful that we’re seeing these sequential improvements, it’s important to remember that the industry is still fairly deep in the abyss and has a long way to go before it climbs out.

In the second quarter, chip sales registered their fourth consecutive monthly increase, the Semiconductor Industry Association said today, suggesting that we may be seeing the beginning of a gradual recovery in the industry. Though worldwide chip sales fell 20 percent year-over-year in the second quarter, they rose 17 percent from the first quarter. And June sales, which totaled $17.2 billion, were 3.7 percent higher from May (click on chart to enlarge).

The chip market is still lousy, but it’s clearly improving. Said SIA President George Scalise: “The fourth-consecutive monthly increase in sales is one indicator the industry is returning to normal seasonal growth patterns.”

Scalise added that focused supply chain management by both producers and customers has done much to temper the impact of the econalypse on the industry. “Inventories have been closely managed, encouraging us to believe that the sequential increase in quarterly sales represents a gradual recovery of demand,” he added.

A bit of good news today amid the chip industry’s seemingly endless procession of bad.

Sales of semiconductors rose 6.4 percent globally from March to April to $15.6 billion, according to the latest metrics from the Semiconductor Industry Association (click on the chart below).

But at $15.6 billion, they were still about 25 percent below the $20.9 billion reported last April. So while a better month than March, April is still a tremendous disappointment–although the SIA is hoping it signals a return to normal sales patterns, albeit at a lower level.

“The better-than-expected 6.4 percent sequential increase in April sales was driven by moderate improvements in a number of end-demand drivers and inventory replenishment,” said SIA President George Scalise. “The PC market–a major consumer of semiconductors–has been stronger than predicted earlier in the year.”

Good news for chip vendors like Intel (INTC) and AMD (AMD), right? One question, though: Since when is inventory replenishment growth?

Another ugly SIA metric in a parade of them, though optimists will say that slight uptick in March is a sign that the industry has finally found a bottom from which to scramble upward. “The modest sequential rebound in worldwide sales in March suggests that demand has stabilized somewhat, albeit at substantially lower levels than last year,” SIA President George Scalise said in the report. “While all major product sectors showed month-on-month growth, there continues to be limited visibility in end markets. There are some bright spots such as ‘smart phones’ and ‘netbook’ PCs, but there are no clear signs of early firming of demand in other major end markets such as automotive, corporate information technology, and consumer electronics.”

So, perhaps we’re not on our way to the depths plumbed back in 2001-2002. And perhaps we are. The SIA doesn’t quite seem to know.

Clearly, chip sales are tanking and we’re now well on our way to the depths plumbed back in 2001-2002. “The global semiconductor industry is going through one of the steepest corrections in its history,” said SIA President George Scalise. “While it would be premature to conclude that the sales decline has hit bottom, there are some indications that the rate of decline has moderated from the final quarter of 2008.”

Well, that’s reassuring…

Clearly, the slowdown in the U.S. economy has reduced demand for electronics goods and, by extension, the chips on which they run. Said SIA president George Scalise, “The worldwide economic crisis is having an impact on demand for semiconductors, but to a lesser degree than some other major industry sectors.”

Right now, anyway. According to Gartner (IT), chipmakers haven’t yet seen the worst of this downturn. “In the last quarter of 2008, market conditions deteriorated significantly, and as the fourth quarter has progressed, many vendors have issued updated guidance for the quarter, reflecting weakening market conditions,” commented Gartner analyst Andrew Norwood. “Unfortunately for vendors, 2009 is going to be considerably worse. Some have compared the precipitous decline in semiconductor demand to that of the 2001 ‘dot-com’ bubble. However, unlike 2001, this economic downturn is much more broad-based and not limited primarily to the technology sector.”

If you haven’t stopped tracking them already, that is.

This morning, the SIA released its annual forecast of global semiconductor sales and it is a dismal one. So dismal, in fact, that the Association expects global chip sales to decline in 2009–something not seen since 2001. According to SIA, chip sales will fall next year to $246.7 billion, down 5.6 percent from 2008.

As I said, dismal.

“The current global economic turmoil is clearly having a significant impact on semiconductor sales,” said SIA President George Scalise. Indications are that both consumer and corporate spending on technology will decline in 2009. Visibility is very limited, and much will depend on how quickly public policy makers can act to restore consumer confidence.”

And, of course, it will sooner or later. Certainly, the Semiconductor Industry Association, which provided the sales numbers above, thinks so. Earlier this week, it called on the U.S. House of Representatives to pass the $700 billion financial rescue package before it. “Consumer demand accounts for more than two-thirds of the U.S. economy,” said SIA president George Scalise. “A slowdown in sales of a broad range of consumer products such as personal computers, cellphones, and entertainment electronics would have an adverse impact on semiconductor sales in the fourth quarter, which is normally the strongest quarter for the chip industry. The entire supply chain, including our suppliers and customers, will be harmed if access to credit becomes difficult.”