July 5, 2005 – Worldwide sales of semiconductors declined slightly in May to $18.05 billion, a sequential decline of 0.5% from the $18.14 billion reported in April, the Semiconductor Industry Association (SIA) reported on July 2. May sales were up 4.1% from the $17.34 billion reported in May 2004.

“Attrition in DRAM prices, which saw a sequential decline of 6%, was the major contributing factor in a slight decline in worldwide semiconductor sales in May,” said SIA president George Scalise. “DRAMs are one of the largest segments of the total semiconductor market; consequently price swings in this segment have a large impact on total chip sales.

“Unit sales of cell phones have continued to outpace earlier forecasts, contributing to growth in sales of semiconductor products such as DSPs (digital signal processors) and analog chips,” Scalise continued. “A recent report from Banc of America Securities now projects that handset shipments will grow by 18% to 795 million units in 2005. At the same time, the semiconductor content of cell phones continues to increase with each new generation.”

The SIA’s 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.