SIA charts semi slowdown: September sales up 1.6% year-over-year

Year-to-date sales growth of 4% trails mid-year forecast of 4.5%; sinking memory prices drag down total.

By Matthew Miller, Editor in Chief, EDN.com -- Electronic News, 10/30/2008

Semiconductor revenues in September hit $23 billion, an anemic 1.6% increase over $22.6 billion in September 2007 and 1.1% over August 2008's $22.7 billion, the Semiconductor Industry Association reported today.

At $196.4 billion, year-to-date revenues are running 4% ahead of the $189 billion the industry generated in the first nine months of 2007, but lag behind even the SIA's latest revised forecast of 4.5% and a far cry from the 7.7% growth rate in the organization's original forecast in November 2007.

In addition to the ongoing economic turmoil, the association cited price erosion among memory devices as a culprit for the poor showing. Excluding memory products, sales actually grew 7.8% year-over-year, according to the SIA. And it's not that manufacturers aren't consuming memory devices; in bit terms, demand for some types has grown by more than 100% this year, according to the SIA. Nonetheless, falling prices saw year-over-year September revenue from flash memory decline by 37.5%, while DRAM sales dropped 11.1%.

The SIA pointed to strong sales of cell phones and PCs in emerging markets as bright spots in an otherwise gloomy picture. Rising income, coupled with more affordable end-user pricing, is driving sales of phones and PCs, which in turn represent the two biggest drivers of semiconductor sales, George Scalise, the SIA's president, said in a statement.

The SIA's data (below) bears out the regional variance, with the month-to-month and year-over-year numbers for the Americas showing the largest declines, while the Asia pacific region continues to enjoy growth.