January Semiconductor Sales Essentially Flat with 2007

by Semiconductor Industry Association

SALES DECLINE BY 3.6 PERCENT FROM DECEMBER

SAN JOSE, CA – March 3, 2008 — Worldwide sales of semiconductors in January were $21.5 billion, a nominal increase of 0.03 percent from January 2007, the Semiconductor Industry Association (SIA) reported today. Sales declined by 3.6 percent from December 2007 when the industry reported sales of $22.3 billion. 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 percent 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 percent for PCs and 12 to 15 percent for cellular handsets in 2008. PCs and cell phones together account for approximately 60 percent of worldwide semiconductor sales.

“The U.S. 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 U.S. has created new opportunities for chipmakers.”

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