May 1, 2008 – The global semiconductor market is building strength, according to latest industry sales figures, but the SIA admits it’s hard to tell because of the weak memory sector.
Global sales of semiconductors rose slightly in March to $20.45B, up 3.4% vs. Feb. 2008 and 3.8% vs. March 2007. Taking out memory, though, Y-Y growth would be a “very healthy” 11%, noted SIA president George Scalise, in a statement.
For 1Q08, sales totaled $63.4B, with similar Y-Y growth (+3.8%), but a slowdown from 4Q07 (-5.1%).
Consumer purchases of electronic goods in world markets more than made up for slowing chip sales and a sluggish economy in the US, noted Scalise, adding that US chip sales still managed to eke out 2.3% Y-Y growth in 1Q08.
One good sign: PC unit sales are on the rise (+12% in 1Q, according to Gartner), also with strength outside the US, which now accounts for just 21% of worldwide PC demand vs. 31% just five years ago. Corresponding to the strength in the PC segment, sales of microprocessors increased 13.4% Y-Y in 1Q and units rose 17.4%, though ASPs declined by “a modest” 3.5%, Scalise noted.
Another healthy end market, cell phones, also saw good unit shipment growth (14.3% Y-Y) in 1Q, driven by rapidly expanding consumer demand in emerging markets, noted Scalise. Memory capacity in a typical PC has more than doubled since 2006, while DRAM content in a typical handset has tripled, and NAND content has spiked >1300%.
In what’s become a familiar trend, DRAM prices are still slumping (-37.4% Y-Y) despite good unit shipments (+30.6% Y-Y) — and ASPs lost more than half their value (-52%) if product mix isn’t taken into account. The SIA cited figures from Micron that 512Mb DRAM prices declined a whopping 73% Y-Y. But JP Morgan sees a counterbalance with total DRAM bit shipments rising 56% this year.
On the NAND flash side, sales grew 45.9% Y-Y and unit shipments rose 46%, but “prices remain under pressure,” according to the SIA, again citing Micron stats that 8Gb NAND ASPs slumped 70% Y-Y.
Despite the uncertainty in the memory sector, Scalise summed up that global demand “is in line with our expectations given current economic conditions, and we remain optimistic for the year.”
Worldwide semiconductor sales*, March 2008
(US $B)
Market……..Current month……..vs. prior month (%)…………….vs. year-ago (%)
Americas…………….3.42……………………3.30 (3.5%)……………………3.34 (2.3%)
Europe………………..3.40……………………3.33 (2.1%)…………………3.39 (0.5%)
Japan………………….4.25……………………3.98 (6.5%)…………………..3.87 (9.6%)
Asia Pacific………..10.08……………………9.83 (2.5%)…………………9.76 (3.3%)
TOTAL……………….21.15………………….20.45 (3.4%)………………..20.36 (3.8%)
Market…………….Jan/Feb/Mar…………vs. Oct/Nov/Dec (%)
Americas……………………3.42……………………3.65 (-6.5%)
Europe……………………….3.40……………………3.53 (-3.6%)
Japan…………………………4.25……………………4.31 (-1.4%)
Asia Pacific……………….10.08…………………..10.79 (-6.6%)
TOTAL……………………..21.15………………….22.28 (-5.1%)
* Based on three-month average
Source: SIA