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Memory glut continues to impact semiconductor growth, say SIA

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SIAThe continued over-supply of memory devices is continuing to impact overall semiconductor growth figures, according to the Semiconductor Industry Association (SIA). Excluding the memory sector from sales reporting data, the semiconductor industry would have shown an 11 percent year-on-year level of growth, against the actual low single digit increase the industry as a whole experienced in 2007. 

According to the SIA, DRAM sales declined by 37.4 percent year-on-year despite a 30.6 percent increase in unit shipments. ASPs declined by 52 percent - not taking product mix into account. According to Micron Technology, 512Mb DRAM prices declined 73 percent year-on-year.

Total DRAM bit shipments are expected to grow by 56 percent in 2008, according JP Morgan.

Sales of NAND flash memory revenue grew by 45.9 percent in the first quarter on unit shipments that increased almost 46 percent over last year. According to Micron, ASPs for 8Gb NAND were down 70 percent from March 2007.

“Micron noted that the memory capacity of a typical PC has more than doubled from 2006 to 2008, to 1,817 MB on average this year,” said George Scalise, SIA President . “The company also reported that the DRAM content of a typical handset has tripled from 12 MB to 36 MB, while the NAND content of a handset has increased by more than 1,300 percent to 412 MB this year.”

The observations were made on release of semiconductor sales for the month of March, which saw that sales of $21.1 billion were 3.4 percent higher than the $20.5 billion reported for February 2008. Sales declined by 5.1 percent in the first quarter of 2008 compared to the $66.8 billion for the fourth quarter of 2007.

Worldwide sales of semiconductors of $63.4 billion for the first quarter of 2008 were 3.8 percent higher than the $61.1 billion reported for the first quarter of 2007.

 “Sales were buoyed by growing consumer purchases of electronic products in world markets, more than offsetting the effects of a slowing U.S. economy,” said Scalise. “Although semiconductor sales in the U.S. grew more slowly than overall worldwide sales, revenues in the first quarter of the year still registered growth of 2.3 percent versus the 3.8 percent growth worldwide year-on-year.
“According to a new Gartner report, PC unit sales grew by 12 percent in the first quarter of 2008, reaching 71.1 million units, with strong sales outside the U.S. and slower sales in the U.S. The U.S. market now accounts for approximately 21 percent of worldwide PC demand – down from over 31 percent just five years ago. Strength in the PC market was reflected in sales of microprocessors, which increased by 13.4 percent year-on-year. Average selling prices (ASPs) for microprocessors declined by a modest 3.5 percent over the past year, while units were up by 17.4 percent.”



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