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Semiconductor Sales Fall on Lower Prices

Reuters
Friday, 3 Aug 2007 | 8:22 AM ET

Global semiconductor sales in the second quarter fell 2% from the previous quarter to $59.9 billion, as falling prices outweighed a 7% rise in total unit shipments, an industry group said on Friday.

"The major story for the chip industry for the first half of 2007 continues to be rapid price attrition," Semiconductor Industry Association President George Scalise said in a report.

Consumer demand for personal computers and cell phones, which account for about 60% of all semiconductor demand, was growing in line with forecasts, but prices were falling, he said.

Sales in June fell to $20 billion from $20.3 billion in May, the association said.

"PC buyers are continuing to reap the benefits of declining prices for microprocessors and DRAMs, which enable PC manufacturers to offer very powerful systems at attractive prices," he said.

"The average price of a desktop system has fallen to around $700, while the memory content of these machines has increased by approximately 50% over last year."

DRAM prices declined nearly 40% while unit shipments grew by almost 66% year on year, he said, adding that the same trend was seen in NAND flash chips.

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