February Semiconductor Sales Show Modest Year-on-Year Gain

by Semiconductor Industry Association

SALES DECLINE BY 4.9 PERCENT FROM JANUARY

SAN JOSE, CA – March 31, 2008 — Worldwide sales of semiconductors in February were $20.44 billion, an increase of 1.5 percent from February 2007 when sales were $20.14 billion, the Semiconductor Industry Association (SIA) reported today. Sales declined by 4.9 percent from January when the industry reported sales of $21.48 billion. SIA said the sequential decline in February sales was in line with normal seasonal patterns for the industry.

“Continued price attrition in DRAMs masked underlying strength in global chip sales in February,” said SIA President George Scalise. “Excluding memory products, worldwide semiconductor sales grew by nearly 10 percent year-on-year. DRAM revenues declined by more than 40 percent year-on-year despite a 43 percent increase in unit shipments. Average selling prices (ASPs) for DRAMs declined by nearly 60 percent year-on-year. Total unit shipments for all semiconductor products increased by 11.6 percent year-on-year, indicating strength in the end markets that drive demand for microchips.

“Despite a slowing U.S. economy, markets outside the U.S. continued to show robust growth in demand for electronic products that drive semiconductor sales,” Scalise said. SIA cited reports from JPMorgan and Gartner showing strong sales of personal computers and handsets in international markets. “The Asia-Pacific region, which includes China, has overtaken the U.S. as the largest market for PCs. The Rest-of-the-World, which includes Eastern Europe, Africa and South America, equaled the number of units sold in the U.S. in 2007 and is poised to surpass the U.S. market in PC unit sales this year.”

In handsets, the growth in international markets is even more dramatic, especially in the Asia-Pacific region. According to JPMorgan, unit shipments of handsets in the Asia-Pacific region will reach almost 540 million units in 2008 – over three times more than the 161.6 million units they expect will be sold in the U.S.

“High energy prices and turmoil in the U.S. housing market undoubtedly have reduced the discretionary spending of American consumers,” Scalise continued. “While any decline in U.S. consumer spending has an effect on offshore electronics manufacturers, the rapid growth of sales of consumer electronics in other markets is continuing to create opportunities for semiconductor manufacturers,” Scalise concluded.

About the SIA Global Sales Report

The SIA Global Sales Report (GSR) is a three-month moving average of sales activity. The GSR is tabulated by the World Semiconductor Trade Statistics (WSTS) organization, which represents approximately 66 companies. The moving average is a mathematical smoothing technique that mitigates variations due to companies’ financial calendars.

About the SIA

The SIA is the leading voice for the semiconductor industry and has represented U.S. semiconductor companies since 1977. Collectively, the chip industry employs a domestic workforce of 232,000 people. More information about the SIA can be found at www.sia-online.org.

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