2008 saw first chip-sales drop since 2001

Global semiconductor sales fell 22 per cent in December amid a slump in demand for a many products that use chips, ranging from computers and mobile phones to cars, the Semiconductor Industry Association (SIA) has claimed.

The SIA said sales fell $17.4bn from $22.3bn. Sales in December were down 16.6 per cent from November levels. By contrast, November chip sales fell only 10 per cent from November 2007. For the full year, sales dropped 2.8 per cent on 2007, the first full-year decline since 2001.

“The global economic recession severely dampened semiconductor sales in the fourth quarter of 2008, historically a strong quarter for the industry,” said SIA president George Scalise, in a statement.

He cited weakening demand for the major drivers of semiconductor sales - including automotive products, personal computers, cell phones, and corporate information technology products. Memories contributed to the fall, he noted: “Once again, the steepest revenue declines were in the memory sector where price pressure more than offset significant growth in total bit shipments.”

Scalise added: “The industry is currently facing an unprecedented period of uncertainty. A resumption of sales growth will depend in part on the effectiveness of various measures now under consideration by the Federal government to restore consumer confidence, improve liquidity, and stimulate economic growth.”

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