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Recession Slams Global Semiconductor Sales

The report is just the latest bad news for the chip industry, which is reeling from a worldwide drop in consumer electronics and PC sales because of the recession.
Worldwide semiconductor sales fell in November, as the economic downturn continued to hammer chipmakers, industry figures released Friday showed.

Sales of semiconductors declined 9.8% to $20.8 billion from November 2007, when revenue hit $23.1 billion, the Semiconductor Industry Association reported. Sales were 7.2% lower than the $22.4 billion in October.

Excluding memory products, which have suffered all year from overproduction and weak demand, the industry did much better, but still saw revenue fall. Sales excluding memory fell 4.8% year to year to $17.3 billion from $18.2 billion.

"The worldwide economic crisis is having an impact on demand for semiconductors, but to a lesser degree than some other major industry sectors," SIA president George Scalise said in a statement.

Overall sales for the first 11 months of 2008 were $232.7 billion, an increase of 0.2% from the same period last year, the SIA said. Excluding memory products, year-to-year sales for the same period rose 5.6%.

The SIA numbers were just the latest bad news for the semiconductor industry, which is reeling from a worldwide drop in consumer electronics and PC sales because of the economic recession.

The industry is expected to see its first revenue decline in seven years in 2008, according to market researcher iSuppli. Global revenue is expected to fall by 2% to $266.6 billion from $272 billion in 2007.

The new figure is a dramatic drop from the research firm's September forecast of 3.5% growth and will be the first year-to-year decline for the industry since the dot-com bust of 2001 that sent revenue plummeting by 28.7%.

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