June 04, 2007 06:00 AM

April Chip Sales Grew by 1.6 Percent from 2006

SAN JOSE, Calif.--(BUSINESS WIRE)--Worldwide sales of semiconductors of $19.9 billion in April were 1.6 percent higher than the $19.6 billion reported for April of 2006, but 2.1 percent lower than the $20.3 billion reported for March 2007, the Semiconductor Industry Association (SIA) reported today. Total sales for the first four months of 2007 are up 3.7 percent compared to the same period of 2006.

“A very competitive semiconductor market, with declining average selling prices (ASPs) in major industry segments, contributed to a sequential decline in worldwide chip sales,” said SIA President George Scalise. “Several of the largest segments of the semiconductor market – microprocessors, DRAMs, and NAND flash – are all experiencing ASPs that are declining more rapidly than historical patterns, offsetting growth in unit shipments. Average selling prices for microprocessors have been under pressure for the past year, as clearly shown during the first four months of this year. January to April sales were down by nearly 2 percent from the same period of 2006, while unit shipments were up by nearly 10 percent.”

The numbers for DRAMs and NAND flash reflect a similar pattern of lower ASPs and higher unit shipments. DRAM unit shipments grew by nearly 50 percent compared to April of 2006, but total sales grew by 27 percent in the face of declining ASPs. NAND flash unit shipments were up 54 percent compared to a year ago, while total sales declined by nearly 1 percent as a result of price attrition.

“Consumer spending on electronics products appears to have held up reasonably well despite a slowdown in economic growth in some regions of the world,” Scalise continued. “Unit demand for semiconductors remains strong. ASPs have declined more than historical patterns, contributing to global sales that are lower than expected but still ahead of last year’s record level,” Scalise concluded.

The SIA noted that total semiconductor capacity utilization grew slightly in the first quarter of 2007, reaching 87.6 percent compared to 86.8 percent in the fourth quarter of 2006. Foundry capacity utilization declined to 79.8 percent in the first quarter compared to 80.9 percent in the immediate-prior quarter. According to iSuppli, an independent market analysis firm, excess semiconductor inventories are increasing, reflecting expectations of growing demand in the second half of the year.

SIA will issue an updated forecast for 2007-2009 on June 13, 2007.

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.