SIA: October chip sales inch up, consumer expectations high

December 3, 2007 – Global semiconductor sales inched up 2.1% in October to $23.07B, keeping in line with projections of about 4% growth for the year, according to data from the Semiconductor Industry Association (SIA).

Strong unit demand for PCs was cited as the main growth driver for major chip sectors DRAM and microprocessors, the SIA noted. DRAM unit shipments are up 55% year-to-date vs. the same period in 2006, while MPU units are up 15% — in stark contrast to anemic 4% YTD sales growth for each category.

“Consumers are reaping huge benefits from continued rapid price attrition in key sectors of the semiconductor market,” said SIA president George Scalise, in a statement. “Today’s typical personal computer costs less than a third of the typical unit of a decade ago but is 100x more powerful due to continuing advances in semiconductor technology that have driven down costs while significantly enhancing the speed, capacity, and performance of the chips that go into PCs.”

PC sales were stronger than expected in 3Q07, he noted, leading JP Morgan to hike its unit sales outlook from 11%-12% to at least 13.5%. PC sales are also seeing a significant shift in demand to Asia and Rest-of-World regions, which combined will surpass the US this year.

Scalise also noted that early analysis of “Black Friday” retail sales (the day after Thanksgiving, seen as a benchmark for consumer holiday demand) indicate “strong sales of consumer electronics products,” suggesting that “reported declines in consumer confidence or other concerns” may not have had as negative an impact as feared.


Worldwide semiconductor sales*, October 2007
(US $B)

Market……..Current month……..vs. prior month (%)…………….vs. year-ago (%)

Americas…………….3.87……………………3.81 (1.6%)……………………3.99 (-3.1%)
Europe………………..3.62……………………3.53 (2.5%)…………………..3.54 (2.2%)
Japan………………….4.37……………………4.26 (2.7%)……………………4.10 (6.6%)
Asia Pacific………..11.21…………………..11.01 (1.9%)…………………10.34 (8.5%)
TOTAL……………….23.07………………….22.60 (2.1%)…………………21.97 (5.0%)

Market…………….Aug/Sept/Oct……………May/Jun/July (%)

Americas……………………3.87……………………3.48 (11.2%)
Europe……………………….3.62……………………3.28 (10.3%)
Japan…………………………4.37……………………3.96 (10.3%)
Asia Pacific……………….11.21……………………9.87 (13.6%)
TOTAL……………………..23.07………………….20.60 (12.0%)

* Based on three-month average

Source: SIA

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