September Semiconductor Sales Up 1.6 Percent Year-on Year

by Semiconductor Industry Association

SALES UP 4 PERCENT IN FIRST NINE MONTHS OF 2008

SAN JOSE, CA – October 30, 2008 – Worldwide sales of semiconductors, the second-largest U.S. export, increased by 1.6 percent to $23 billion in September compared to sales of $22.6 billion in September 2007. Sales grew by 1.1 percent from August 2008 when sales were $22.7 billion. Sales of $196.4 billion for the first nine months of 2008 were up by 4 percent compared to the first nine months of 2007 when sales were $189 billion. Excluding memory products, industry sales in September grew by 7.8 percent year-on-year. Bit demand for some memory products grew by more than 100 percent year-on-year, however, significant price attrition continued to impact revenues. Sales of flash memory chips declined by 37.5 percent year-on-year, while sales of DRAMs declined by 11.1 percent from September 2007.

“The rate of semiconductor sales growth slowed in September as the industry began to feel the effects of the turmoil in world financial markets,” said SIA President George Scalise. “We face a near-term period of uncertainty with a steep decline in consumer confidence and caution in the enterprise segment.” Scalise noted that the Conference Board this week reported a drop of more than 20 points in its Consumer Confidence Index, which fell from 61.4 in September to a new low of 38. “The picture is somewhat brighter in emerging markets,” Scalise continued. “Sales of personal computers and cell phones – the two largest drivers of semiconductor sales – remain strong in these emerging markets, driven by growing consumer populations and rising income levels coupled with more affordable pricing. Economic growth in major developing countries is still high in mid- to high-single digits, albeit below recent peaks.”

Analysts project PC unit sales will grow by at least 11.5 percent this year. Developing countries now account for nearly half of all unit sales of PCs. JPMorgan projects 8.7 percent year-on-year unit growth in cell phone sales to 1.35 billion in 2008. Developing countries are expected to account for nearly 70 percent of unit sales of cell phones in 2008.

Sales of other consumer electronic products, including MP3/PMP devices and LCD televisions remained positive through the first nine months of 2008, according to iSuppli. The market research firm projects 5 percent growth for all consumer electronics, with 11 percent growth for MP3/PMP units and 33 percent growth in LCD TV units this year. Consumer purchases drive more than 50 percent of total semiconductor sales.

“Year-to-date chip sales growth of 4 percent trails the SIA mid-year forecast of 4.5 percent growth,” said Scalise. “Restoring consumer confidence is key to growing semiconductor sales going forward,” 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, an independent, non-profit organization established by the global semiconductor industry to compile industry statistics. The moving average is a mathematical smoothing technique that mitigates variations due to differences in companies’ financial calendars.

TO VIEW DATA TABLE AND GRAPH CLICK HERE.

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 216,000 people. More information about the SIA can be found at www.sia-online.org.

For more information:
Semiconductor Industry Association
John Greenagel
408-436-6600
mailbox@sia-online.org