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SIA reports 3.8% growth in semiconductors

Posted: 05 May 2008     Print Version  Bookmark and Share

Keywords:semiconductor sales  DRAM  NAND flash  microprocessors 

The Semiconductor Industry Association (SIA) reported that global sales of semiconductors rose 3.8 per cent, from Rs.246,378.78 crore ($61.1 billion) figures of Q1 07, to Rs.255,653.27 crore ($63.4 billion) for Q1 08.

March sales of Rs.85,083.34 crore ($21.1 billion) rose 3.4 per cent from Rs.82,663.91 crore ($20.5 billion) reported for February. Sales declined by 5.1 per cent in Q1 08 compared to the Rs.269,363.38 crore ($66.8 billion) for Q4 07 (View graph here). SIA said the decline reflects a normal seasonal decline from the historically strong fourth quarter.

Market explained

"Weakness in memory revenue as a result of rapid price erosion masks the overall strength of semiconductor sales," said SIA president George Scalise. "Excluding memory products, total semiconductor sales increased by a very healthy 11 per cent y-on-y."

According to Scalise, "Sales were buoyed by growing consumer purchases of electronic products in world markets, more than offsetting the effects of a slowing U.S. economy. Although semiconductor sales in the U.S. grew more slowly than overall worldwide sales, revenues in the first quarter of the year still registered growth of 2.3 per cent vs. the 3.8 per cent growth worldwide y-on-y (View Table here)."

Scalise also added that according to a new Gartner report, PC unit sales grew by 12 per cent in Q1 08, reaching 71.1 million units, with strong sales outside the U.S. and slower sales within the country. The U.S. market now accounts for approximately 21 per cent of worldwide PC demand—down from over 31 per cent just five years ago.

"Strength in the PC market was reflected in sales of microprocessors, which increased by 13.4 per cent y-on-y," said Scalise, "ASPs for microprocessors declined by a modest 3.5 per cent over the past year, while units were up by 17.4 per cent." PCs are said to be the largest single end market for semiconductors.

DRAM under pressure

DRAM sales declined by 37.4 per cent y-on-y despite a 30.6 per cent increase in unit shipments. ASPs declined by 52 per cent, not taking product mix into account. According to Micron Technology, 512Mbit DRAM prices declined 73 per cent y-on-yr. Total DRAM bit shipments, according to JP Morgan, are expected to grow by 56 per cent in 2008.

Sales of NAND flash memory revenue grew by 45.9 per cent in the first quarter on unit shipments that increased almost 46 per cent over last year. Prices remain under pressure.

According to Micron, ASPs for 8Gbit NAND were down 70 per cent from March 2007. SIA noted that NAND flash is widely used in cell phones, MP3 players, digital cameras and other hand-held electronic devices.

Unit shipments of cell phones, which account for 20 per cent of semiconductor sales, increased by 14.3 per cent y-on-y.

"Emerging markets are driving sales of cell phones, reflecting the rapid expansion of consumer markets in these regions," Scalise noted.

Consumer electronics

A recent report from Micron Technology underscores the rapid growth of semiconductor content in consumer electronic products. "Micron noted that the memory capacity of a typical PC has more than doubled from 2006 to 2008, to 1,817MB on average this year," said Scalise. "The company also reported that the DRAM content of a typical handset has tripled from 12MB to 36MB, while the NAND content of a handset has increased by over 1,300 per cent to 412MB this year.

"Healthy sales of electronic products in world markets continue to drive demand for semiconductors. Global demand is in line with our expectations given current economic conditions, and we remain optimistic for the year," Scalise concluded.





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