Chip Sales Slump Hits 30% On Weak Electronics Market

Year-to-year sales in all geographic regions fell in the quarter, with the exception of Japan.
Global sales of semiconductors dove nearly 30% in the first quarter as sales of PCs, electronics, and corporate information technology remained weak, a trade group said Friday.

Sales in the quarter reached $44 billion, 29.9% less than the same period a year ago, the Semiconductor Industry Association reported. Compared with the fourth quarter of 2008, sales fell 15.7%.

The only positive note in the bleak numbers was the small month-to-month increase. March saw a 3.3% increase in sales from February.

"The modest sequential rebound in worldwide sales in March suggests that demand has stabilized somewhat, albeit at substantially lower levels than last year," SIA president George Scalise said in a statement.

Year-to-year sales in all geographic regions fell in the quarter. February to March, all regions, with the exception of Japan, showed gains. Japan was sharply lower, because of the drop in the country's economic output, the SIA said.

Within the major product sectors that use semiconductors, sales were up in smartphones and netbooks. However, there were no clear signs that demand was improving in other major end markets, such as automotive, corporate IT, and consumer electronics, SIA said.

"The global chip industry continues to reflect the influence of the worldwide economic slowdown," Scalise said. The economic stimulus efforts under way in the United States combined with other countries aren't expected to have an impact on chip sales until 2010.

The SIA's findings were in line with those of analyst firms. Gartner in February dropped its 2009 revenue forecast for the semiconductor industry, saying the market would fall 24.1% from 2008.

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