Semiconductor Chip Sales Grow by 4.9% to $21.5 Billion in August

Worldwide sales of semiconductors rose sharply in August, growing to $21.5 billion, an increase of 4.9 percent over August 2006, when sales were $20.5 billion, and an increase of 4.5 percent from July of this year when sales were $20.6 billion, the Semiconductor Industry Association (SIA) reported today.

Sales of NAND flash memory devices led the growth as supplies tightened and prices firmed. NAND flash sales were up by 48 percent compared to August 2006 and up by 19 percent from July of this year.

“Normal seasonal patterns contributed to a healthy 4.5 percent sequential increase in worldwide semiconductor sales in August,” said SIA President George Scalise. “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.”

Worldwide sales of semiconductors - August 2007Scalise noted 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. “PC unit growth is proving to be very solid in 2007,” said Scalise. “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. 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. 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.”

Scalise noted that the semiconductor content of many existing products is growing rapidly. “One example is the automobile where engine control, global positioning systems, braking control, audio systems, and sensors for safety applications are demanding more semiconductors for each new model. Semiconductor Insights (SI) recently reported that the automobile is evolving into an electronic device from a mechanical one.

“The semiconductor industry will continue to outpace overall economic growth with consumer demand leading the way,” Scalise concluded.

About the SIA Global Sales Report
The SIA Global Sales Report (GSR) is a three-month moving average of sales activity. The GSR is tabulated by the World Semiconductor Trade Statistics (WSTS) organization, which represents approximately 66 companies. The moving average is a mathematical smoothing technique that mitigates variations due to companies’ financial calendars.

August 2007 (Billions)

Month-to-Month Sales

Market Last Month Current Month % Change
Americas 3.48 3.59 3.0%
Europe 3.29 3.38 2.9%
Japan 3.96 4.10 3.5%
Asia Pacific 9.88 10.46 5.9%
Total 20.61 21.52 4.5%

Year-to-Year Sales

Market Last Month Current Month % Change
Americas 3.83 3.59 -6.2%
Europe 3.21 3.38 5.3%
Japan 3.92 4.10 4.6%
Asia Pacific 9.56 10.46 9.4%
Total 20.51 21.52 4.9%

Three-Month-Moving Average Sales

Market Mar / Apr / May Jun / Jul / Aug % Change
Americas 3.34 3.59 7.2%
Europe 3.27 3.38 3.5%
Japan 3.95 4.10 3.7%
Asia Pacific 9.75 10.46 7.3%
Total 20.31 21.52 6.0%

About the SIA
The SIA is the leading voice for the semiconductor industry and has represented U.S. semiconductor companies since 1977. Collectively, the chip industry employs a domestic workforce of 232,000 people.