April 2, 2007 – Worldwide sales of semiconductors sunk 6.5% in February to $20.09 billion, with seasonal trends overshadowed by declining unit shipments and lower average selling prices, according to data from the Semiconductor Industry Association (SIA).
Sales were down in practically all major categories and across all geographies, Scalise noted in a statement. Unit shipments and total sales of microprocessors and DSP chips saw sequential declines, while a sequential increase in NAND flash unit shipments was offset by double-digit declines in sales, “indicating very competitive market conditions,” he said.
Year-on-year, overall chip sales are still running slightly ahead (4.2%) of the pace from a year ago, Scalise noted, though conditions remain “fiercely competitive” with across-the-board increases in unit shipments balanced by ASP declines. Demand has grown from a year ago for two key products, microprocessors (sales up 8%) and NAND flash (unit sales up 40%), despite punishing ASP declines over the past 12 months (-15% for micros, and nearly 50% for NAND flash). With these two segments as indicators for conditions in key semiconductor end markets of computers and consumer devices (which account for ~60% of semiconductor sales), “both competitive conditions and product mix issues appear to be affecting revenues of these key components,” he said.
By region, there was particular softness in the US (8.3%) and Asia-Pacific (-7.7%). The US also witnessed a sales decline vs. a year ago (-8.6%), while other regions were at least unchanged (Japan, 0.6%) or showed decent growth (Asia-Pacific 10.1%, Europe 7.2%). The three-month moving average, used to smooth out variations attributed to companies’ financial calendars, shows double-digit sales declines in every region from Dec.-Feb, compared with the previous three-month period during the fall.
The SIA also noted that an overall capacity utilization decline, to 86.8% in 4Q06 from 88.9% in 3Q06, was due in large part to a rampdown in foundry usage — foundry utilization slumped to 80.9% in 4Q from 91.5% in the previous quarter, due to inventory builds in the semiconductor supply chain.
Chip sales, February 2007 (US $B)
Market……….Current month…….vs. prior month…….vs. year-ago
Americas……….3.40………………….-8.3%…………………-8.6%
Europe………….3.33………………….-4.4%………………….7.2%
Japan……………3.67………………….-3.3%………………….0.6%
Asia Pacific…..9.69…………………-7.7%………………..10.1%
TOTAL………….20.09…………………-6.5%………………….4.2%
Chip sales, three-month moving average (US $B)
Market………..Aug/Sep/Oct……..Nov/Dec/Jan……….% change
Americas…………3.97…………………..3.40…………………….-14.4%
Europe……………3.68…………………..3.33…………………….-9.6%
Japan……………..4.10…………………..3.67…………………….-10.5%
Asia Pacific…….10.79…………………9.69……………………..-10.2%
Total………………22.55………………….20.09……………………-10.9%
Source: SIA