SIA Confirms April Semiconductor Sales Stall

The three-month average of worldwide sales of semiconductors came in at $18.22 billion, a decline of 1% from March's figures but up from the tally in April 2004.
LONDON — The three-month average of worldwide sales of semiconductors came in at $18.15 billion in April according to World Semiconductor Trade Statistics (WSTS), the U.S. Semiconductor Industry Association reported Tuesday (May 31). 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.

The $18.15 billion sales figure was lower than analysts' earlier predictions (see May 27 story). The SIA's Global Sales Report (GSR) is tabulated by the World Semiconductor Trade Statistics (WSTS) organization as a moving three-month average to reduce the swings due to reporting effects from different companies.

The sequential decline in the three-month average means that the actual global sales of semiconductors in April was lower than actual sales in January and the SIA commented that April is traditionally a strong month for semiconductor sales.

"Two factors — a decline in DRAM prices and a lower mix of semiconductors for cell phones — contributed to a slight decline in worldwide semiconductor sales in April," said George Scalise, president of the SIA (San Jose, Calif.), in a statement. "For much of the past year, cell phone manufacturers were working off inventories of chips used in low-end cell phones, which resulted in a richer mix of products shipped. Once those inventories were depleted and normal purchasing patterns resumed, overall ASPs for circuits for cell phones declined. Plentiful supplies of DRAMs contributed to declining prices and a 7 percent sequential decline in DRAM sales in April." Scalise noted that DRAM is one of the largest segments of the total semiconductor market.

"Despite the slight decline in April sales, the overall outlook for the semiconductor industry remains strong," said Scalise. "Excess inventories have been eliminated and capacity utilization remains at reasonable levels. Energy prices appear to have stabilized, and U.S. economic growth, an important bellwether for the semiconductor industry, continues to be strong. On the whole, worldwide semiconductor sales continue to run ahead of our November forecast," Scalise concluded.