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Semiconductor Sales Rise in February But Average Prices Slump

Worldwide semiconductor sales in February increased 4.2% from February 2006 but fell 6.5% from January, according to an industry report released today.

The Semiconductor Industry Association said total sales for the month were $20.09 billion, up from $19.28 billion in February 2006, and down from $21.48 billion in January 2007. SIA said sales fell sequentially due to a seasonal decline and lower manufacturing capacity.

'While seasonality clearly contributed to the 6.5% decline in worldwide chip sales month-on-month, declining unit shipments and lower average selling prices (ASPs) in several key market segments were a factor,' said SIA President George Scalise.

Scalise also noted that while sales of microprocessors rose almost 8%, average selling prices dropped 15%, and NAND flash memory semiconductors sales increased 40%, while average prices dropped 50%.

'Year-on-year, we see evidence of the fiercely competitive market conditions,' Scalise said. 'These products tend to be indicators of conditions in important end markets such as personal computers and consumer devices.'

UBS analyst Uche Orji said the sales numbers were weaker than normal seasonality, but in line with his expectations.

'We expect a rebound in March and throughout 2007, likely marking the first quarter as the trough,' Orji wrote in a note to investors.