October Chip Sales Rose 5 Percent Year-on-Year

by Semiconductor Industry Association

SAN JOSE, Calif. – December 3, 2007-

Worldwide semiconductor sales in October rose to $23.1 billion, an increase of 5 percent over the $22 billion reported in October 2006 and 2 percent higher than the $22.6 billion reported in September of this year, the Semiconductor Industry Association (SIA) reported today. Sales of $210.5 billion for the first 10 months of 2007 are running 3.9 percent ahead of the same period of 2006, when sales were $202.6 billion. Year-to-date sales are on pace with the SIA’s November forecast of 3.8 percent growth in worldwide sales for 2007.

“Consumers are reaping huge benefits from continued rapid price attrition in key sectors of the semiconductor market,” said SIA President George Scalise. “Despite a 55 percent year-to-date increase in unit shipments, DRAM revenues are up only 4 percent over January through October 2006 sales.

“The story is similar in the microprocessor segment,” Scalise continued. “Strong unit demand for PCs has driven a 15 percent increase in unit sales of microprocessors for the first 10 months of 2007 compared to the same period of 2006. Revenues, however, are up only 4 percent compared to last year due to price attrition. Today’s typical personal computer costs less than a third of the typical unit of a decade ago but is 100 times more powerful due to continuing advances in semiconductor technology that have driven down costs while significantly enhancing the speed, capacity, and performance of the chips that go into PCs.”

SIA noted that PC sales in the third quarter of 2007 were stronger than expected, leading JPMorgan to increase its forecast of growth in unit sales for the year from 11-12 percent to at least 13.5 percent. According to JP Morgan, the PC market is undergoing significant shifts in geographic demand. In 2006, the U.S. led all regions in PC unit purchases. The new JPMorgan forecast projects that both the Asia-Pacific region and the Rest of World will surpass the U.S. in PC unit sales in 2007.

Scalise noted that early reports from U.S. retailers on “Black Friday” – the day following Thanksgiving that traditionally is the highest-volume sales day for retailers – reported strong sales of consumer electronic products such as GPS systems, computers, Mp3 players, and electronic games.

“We will be closely watching consumer sales of electronic products through the holiday season,” said Scalise. “At this point, it does not appear that reported declines in consumer confidence or other concerns have affected sales of electronic products.”

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 and SIA member companies comprise more than 85% of the U.S. semiconductor industry. 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.

SIA CONTACT

John Greenagel
408-436-6600
mailbox@sia-online.org

Anne Craib
408-436-6600
mailbox@sia-online.org