Semi Industry On Track for Record-Breaking Year

Staff Reporter -- Electronic News, 9/5/2006

Worldwide sales of semiconductors totaled $20.1 billion in July, up over 11.5 percent from July 2005, according to a recent report by the Semiconductor Industry Association (SIA). July's sales represent an increase of 1.8 percent from the $19.8 billion in sales reported in June 2006.

"The worldwide semiconductor industry is on track to surpass $240 billion in sales this year, which represents a new record," SIA president George Scalise said in a statement. "Growth continues to be strong across a broad range of end markets and geographic regions as well, particularly Asia Pacific, which is up over 13 percent year on year, and the United States, where sales increased almost 18 percent over last year," said Scalise.

Capital spending in 2006 is expected to amount to approximately 22 percent of semiconductor sales, in line with anticipated technology requirements and anticipated sales growth. Capacity utilization edged up slightly in Q2, from 89 percent to 91 percent, with leading-edge capacity at 97 percent.

"July sales reflect the historical pattern for the industry with growth in unit demand coupled with declining average selling prices," Scalise noted in the statement. "This trend helps make possible the very attractive prices for many consumer products."

The average selling price for a PC declined by approximately 7 percent year over year. Computer products currently represent over 40 percent of demand for semiconductors, SIA reported.