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Chip sales fall in May amid DRAM slump

Posted: 04 Jul 2005 ?? ?Print Version ?Bookmark and Share

Keywords:semiconductors? dram?

Showing its second consecutive monthly drop, worldwide sales of semiconductors hit $18.05 billion in May, a sequential decline of 0.5 percent from $18.14 billion in April, the Semiconductor Industry Association (SIA) reported on Saturday (July 2).

May sales were up 4.1 percent from the $17.34 billion reported in the like period a year ago, according to the SIA (San Jose) trade group. The SIA's Global Sales Report (GSR) is a three-month moving average of sales activity. The GSR is tabulated by the World Semiconductor Trade Statistics (WSTS) organization, which represents approximately 66 companies.

Chip sales fell in May due to a drop in DRAMs. On a regional basis, Europe and Japan saw its chip sales fall by 5.6 percent and 4.5 percent, respectively, in May, according to the SIA. The Americas market was up 1.9 percent, while Asia-Pacific led the field with 4.7 percent growth.

"Attrition in DRAM prices, which saw a sequential decline of 6 percent, was the major contributing factor in a slight decline in worldwide semiconductor sales in May," said SIA President George Scalise, in a statement. "DRAMs are one of the largest segments of the total semiconductor market, consequently price swings in this segment have a large impact on total chip sales.

"Unit sales of cell phones have continued to outpace earlier forecasts, contributing to growth in sales of semiconductor products such as DSPs (digital signal processors) and analog chips," Scalise said.

Banc of America Securities now projects that handset shipments will grow by 18 percent to 795 million units in 2005, he said.

Still, the market is going backwards. The three-month average of worldwide sales of semiconductors came in at $18.15 billion in April. This was a sequential decline of 1.2 percent from the $18.43 billion reported in March and up 6.9 percent from sales in April of 2004 (see May 31 story).

The three-month average of worldwide sales of semiconductors was $18.43 billion in March 2005, according to the SIA, up 2.2 percent from the February level of $18.04 billion and up 13.2 percent from the same period in 2004 (see May 2 story).

After flat-to-down growth in the first half of 2005, the semiconductor industry is projected to wake up from its lingering lull in the second part of this year (see June 30 story).

- Mark LaPedus

EE Times

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