January chip sales flat from 2007

Worldwide sales of semiconductors in January narrowly edged above their level last year, by just 0.03 per cent to $21.5bn, the Semiconductor Industry Association (SIA) said.

Sales declined by 3.6 per cent from December 2007 when the industry reported sales of $22.3bn. The SIA said the sequential decline in sales was in line with traditional seasonal patterns for the industry.

"Virtually all product lines and all geographic markets experienced slightly lower sales in January," said SIA president George Scalise. "Unit shipments of DRAMs and NAND flash grew modestly in January. Even with healthy demand from important end markets, however, a very competitive environment resulted in price pressures for these products which in turn led to continued erosion in average selling prices. Excluding memory products, semiconductor sales were up by 8.1 per cent year-on-year."

Unit shipments of personal computers and cellular handsets were in line with expectations in January. Analysts are projecting unit growth of around 12 per cent for PCs and 12-15 per cent for cellular handsets in 2008. PCs and cell phones together account for approximately 60 per cent of worldwide semiconductor sales.

"The US economy has entered a period of slower growth that may impact consumer purchases of electronic products," Scalise continued. "However the emergence and growth of large consumer markets outside the US has created new opportunities for chipmakers."

Scalise noted that PC demand outside the US has grown steadily through the past decade. "In 1998, the US accounted for more than 40 per cent of all unit sales of personal computers," he said. "In 2008, according to JP Morgan and Gartner, the US will account for approximately 21 per cent of PC units. Several foreign markets will account for higher unit sales of PCs than the US The emergence of these global markets underscores the importance of maintaining open markets and eliminating barriers to international commerce," Scalise concluded.

Image: The recession in the memory market has put a brake on semiconductor sales growth

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