Global sales of semiconductors were severely impacted by the world-wide economic turmoil in 2008 resulting in the first year-on-year drop in sales since 2001, the Semiconductor Industry Association (SIA) reported. Total sales for 2008 were $248.6 billion compared to $255.6 billion in 2007, a decrease of 2.8 percent. Sales fell from $22.3 billion in December 2007 to $17.4 billion in December 2008, a decline of 22 percent. December sales declined by 16.6 percent from November 2008 when sales were $20.9 billion.
“The global economic recession severely dampened semiconductor sales in the fourth quarter of 2008, historically a strong quarter for the industry,” said SIA President George Scalise. “Weakening demand for the major drivers of semiconductor sales – including automotive products, personal computers, cell phones, and corporate information technology products – resulted in a sharp drop in industry sales that affected nearly all product lines. Once again, the steepest revenue declines were in the memory sector where price pressure more than offset significant growth in total bit shipments.”
“As consumers worldwide drive over 50 percent of demand for semiconductors, the fortunes of the chip industry are increasingly linked to macroeconomic conditions such as GDP, consumer confidence, and disposable income,” Scalise continued. “Sales of electronic products held up reasonably well during the first nine months of 2008, but fell sharply as turmoil in the global financial industry unfolded.
“The memory content of cell phones and PCs continued to increase dramatically driving large increases in total bit shipments. Over the past twelve months, DRAM content of the typical PC grew by 44 percent to an average of 1.8 gigabytes, while the NAND content of a typical cell phone increased by 244 percent. However, severe price pressure resulted in significant declines in revenues for these product lines,” Scalise said.
“The industry is currently facing an unprecedented period of uncertainty. A resumption of sales growth will depend in part on the effectiveness of various measures now under consideration by the Federal government to restore consumer confidence, improve liquidity, and stimulate economic growth,” 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, an independent, non-profit organization established by the global semiconductor industry to compile industry statistics. The moving average is a mathematical smoothing technique that mitigates variations due to differences in companies’ financial calendars.
December 2008 (Billions)
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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 approximately 200,000 people. The semiconductor industry is America’s second-largest exporting industry.