SAN JOSE, CA, July 2 - Worldwide semiconductor sales rose to $17.3 billion in May, up 2.1% from April and 36.9% year-on-year, the SIA reported today. The SIA said the increase is normal for May, which is traditionally one of the stronger months for semiconductor sales.

Sales reached their highest level since December 2000.

SIA credited healthy economic growth in the U.S. and China.

"The industry fundamentals continue to look good, leading us to expect strong growth through the remainder of 2004," SIA said in a statement. "Customers appear to be managing inventories prudently even in the face of supply-demand constraints."

Factory utilization rose to 94% in the first quarter of 2004, from 92% in the fourth quarter 2003.

Sales were up in all regions except Europe, with the strongest growth coming from the Asia-Pacific region, which rose by 4.5% sequentially.