Memory weakness masking healthy semi sales growth, SIA says
By Ann Steffora Mutschler, Senior Editor -- 5/1/2008
Electronic News
With weakness in memory revenue from price erosion masking the overall strength of semiconductor sales, the Semiconductor Industry Association (SIA) reported today that worldwide sales of semiconductors in Q1 reached $63.4 billion, which was 3.8% higher than $61.1 billion in Q1 2007, but 5.1% lower than $66.8 billion in Q4 2007.
“Weakness in memory revenue as a result of rapid price erosion masks the overall strength of semiconductor sales. Excluding memory products, total semiconductor sales increased by a very healthy 11 percent year-on-year,” noted SIA president George Scalise, in a statement.
The SIA also reported that March semiconductor sales were $21.1 billion, which was 3.4% higher than $20.5 billion for February, and that the quarter-over-quarter decline reflects a normal seasonal decline from the historically strong Q4.
(Source: SIA)
“Sales were buoyed by growing consumer purchases of electronic products in world markets, more than offsetting the effects of a slowing US economy. Although semiconductor sales in the US grew more slowly than overall worldwide sales, revenues in the first quarter of the year still registered growth of 2.3% versus the 3.8% growth worldwide year-on-year,” Scalise said.
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Pointing to recent research from Gartner Inc, PC unit sales grew by 12% in Q1, reaching 71.1 million units, with strong sales outside the US and slower sales in the US, with the US market now accounting for approximately 21% of worldwide PC demand, which is down from more than 31% just five years ago, the SIA pointed out.
“Strength in the PC market was reflected in sales of microprocessors, which increased by 13.4% year-on-year. Average selling prices (ASPs) for microprocessors declined by a modest 3.5% over the past year, while units were up by 17.4%,” Scalise continued, adding that PCs are still the largest single end market for semiconductors.
In the DRAM sector, prices continued to be under pressure despite healthy growth in bit demand, and sales declined by 37.4% year-on-year despite a 30.6% increase in unit shipments, while ASPs declined by 52% not taking product mix into account, the SIA reported.
According to Micron Technology, 512Mb DRAM, prices declined 73% year-on-year, while total DRAM bit shipments are expected to grow by 56% this year, JP Morgan believes.
NAND flash memory -- widely used in cell phones, MP3 players, digital cameras and other hand-held electronic devices -- revenue grew by 45.9% in Q1 on unit shipments that increased almost 46% over last year, even though prices remain under pressure. Also, according to Micron, ASPs for 8Gb NAND were down 70% from March 2007.
At the same time, unit shipments of cell phones, which account for 20% of semiconductor sales, increased by 14.3% year-on-year, propelled by emerging markets, which are driving sales of cell phones, reflecting the rapid expansion of consumer markets in these regions.
Quoting a recent report from Micron that underscores the rapid growth of semiconductor content in consumer electronic products, Scalise said, “Micron noted that the memory capacity of a typical PC has more than doubled from 2006 to 2008, to 1,817 MB on average this year. The company also reported that the DRAM content of a typical handset has tripled from 12 MB to 36 MB, while the NAND content of a handset has increased by more than 1,300 percent to 412 MB 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,” he concluded.
edn.com
[Harry: Refer to the link for charts and tables giving a more detailed break down.] |
