SIA: Sales drop off a cliff in Nov.

Jan. 5, 2009 – Global semiconductor sales dropped precipitously in November, which though not unexpected adds an extra layer of anxiety as the industry analyzes consumers’ holiday spending patterns and their influence over the early part of 2009.

Looking at the November data (a three-month average), sales were $20.8B, about -7% lower than October and down nearly -10% from November 2007. The rolling three-month moving average (used to mitigate temporary spikes) shows an -8.2% decline sequentially. As usual, the SIA notes that taking out the volatile memory segment, November chip sales only declined -4.8%.

For the year through November, chip sales were tracking basically flat at a 0.2% increase ($232.2B) — falling below the SIA’s projection of 2.2% growth for the year — though nonmemory sales did better at 5.6% growth during the month.

Red ink was everywhere by geographic region, with the Asia-Pacific taking the brunt of it vs. October (-9.3%, more than twice the decline seen in the US and Europe), probably due to the heavy contract work centered there for the holiday builds. The US still “leads” in Y/Y comparison, though, with sales continuing to worsen, now nearly -20% from a year ago; Europe also clocked in with a double-digit decline (nearly -14%).

“The worldwide economic crisis is having an impact on demand for semiconductors, but to a lesser degree than some other major industry sectors,” pointed out SIA president George Scalise in a statement, adding that the SIA is pressing the US Congress to quickly pass legislation to “strengthen consumer confidence” and stimulate investments to fuel economic growth.


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