June 30, 2008 – Worldwide semiconductor sales rose a few percentage points in May — a historically strong month, as the build-up to prepare for back-to-school and holiday seasons begin — to $21.83B, up 2.8% from April and 7.5% from May 2007.
Through the first five months of 2008, sales are tracking at $103.4B, about 5.3% higher than the same period a year ago (a little better than the 4.3% YTD comparison in April).
As it has in previous months, the SIA also tallied its data minus the sluggish memory sectors, noting that without them semiconductor sales would have been about the same vs. the prior month (2.5% vs. April), but better than a year ago (12.5%). DRAM sales actually rose sequentially in May (6.4%) but were down from a year ago (-20%), while NAND sales improved over both periods (1.4% and 25.5% respectively).
Consumer-market trends are still driving electronics (and semiconductor) sales, but increasingly on a more global scale, noted SIA president George Scalise in a statement, citing data from JP Morgan. A surge in energy prices, while causing concern in all global markets, has also opened up trade between OPEC nations and developing countries, particularly in Asia, which in turn has helped expand consumer markets in those countries, he said. Meanwhile, the US is increasingly less significant in terms of pure market-driving force, now accounting for less than a quarter of total consumer demand — e.g., just 21% of PC unit sales (vs. 31% not long ago) come from the US, and 13% of cell phone sales this year vs. 21% five years ago.
Memory chip unit demand “continues to be strong,” the SIA noted, pointing to estimates from Micron of a 50% surge in DRAM bit content/PC this year to ~2GB/box. And data from Credit Suisse suggests that DRAM capex is slowing this year to help rebalance supply/demand by year’s end.
A month or so after the federal “economic stimulus” payments were handed out to US consumers, it appears to have had a positive impact on consumer spending, SIA’s Scalise noted. “Despite reports of declining consumer confidence in the US, both disposable income and consumer spending rose in May,” he stated, and the distribution of checks for the stimulus and also tax rebates was likely a factor in increased consumer spending. Last month the SIA noted data from the Consumer Electronics Association hoping for an additional $5B in consumer electronic purchases from those “economic stimulus” payments, which by extrapolation meant an extra $1.1B in chip sales.