SIA: NAND supply tightens as holiday build begins

By Colleen Taylor, Contributing Editor -- Electronic News, 10/1/2007

Semiconductor sales worldwide rose sharply in August, growing to $21.5 billion, up 4.5 percent from July sales of $20.6 billion and up 4.9 percent year-over-year from August 2006's sales of $20.5 billion, according to the latest report released today by the Semiconductor Industry Association (SIA).

According to the SIA, sales of NAND flash memory devices led the month's with tightened supplies and firmer prices. NAND flash sales were up by 48 percent compared to August 2006 and up by 19 percent from July of this year, the SIA reported.

"Normal seasonal patterns contributed to a healthy 5 percent sequential increase in worldwide semiconductor sales in August," SIA president George Scalise said in a statement. "August is historically the beginning of the holiday season build by electronics manufacturers, which in turn drives demand for a broad range of semiconductor products."

"PC unit growth is proving to be very solid in 2007," Scalise said, adding that Credit Suisse and the Gartner Group have revised upward their forecasts for growth in unit sales of personal computers from 11 percent to 13 percent for 2007.  "PCs account for approximately 40 percent of all semiconductor sales and are growing most rapidly in emerging markets, where lower-cost PCs with lower silicon content have been selling well."

Also leading the way for semiconductor sales is continued strength in the cell phone segment. "Unit sales of cell phones are also running well ahead of our earlier forecast of 10 percent growth, and we currently expect that total unit sales will be up by 15 percent in 2007," Scalise added. "Increased affordability of handsets is aiding sales in developing markets such as China and India, while demand has also strengthened in established markets such as Europe and the U.S."

Looking ahead, the SIA expressed confidence that the semiconductor industry would continue to post solid growth in the coming months. "The semiconductor industry will continue to outpace overall economic growth with consumer demand leading the way," Scalise concluded.

For commentary on this story, see "Holiday build has started, but too early to tell how electronics supply chain will play out."

**This story was revised on October 2, 2007, following the SIA's revision of its data.**