Semiconductor sales on record high

SIA lowered its forecast for 2008 semiconductor sales growth from 7.7% to 4.3% despite continued healthy demand from key end markets. Total semiconductor sales excluding memory products are forecasted to grow by 7.4% in 2008. The SIA mid-year forecast projects that 2008 sales will reach $266.6 billion and grow to $324.1 billion in 2011. SIA projects a compound annual growth rate of 6.1% for the forecast period, 2008-2011. The revised forecast projects that sales will grow by 6.2% to reach $283.2 billion in 2009, by 8.4% in 2010 to $307 billion. “Key end-markets that drive demand for semiconductors continue to be healthy,” said SIA President George Scalise. “Sales of personal computers, the largest single market for semiconductors, continue to be strong, especially in emerging markets. Total unit sales of PCs are on pace to grow by 10% this year to around 300 million units. Cell phone unit shipments are expected to grow by about 12% to more than 1.3 billion units, with the largest growth coming from China, India, and other emerging markets.” SIA reported that unit sales of many other consumer products continue to be strong despite widespread concerns about consumer confidence and rising energy prices. Unit sales of flat-panel televisions are expected to grow by more than 29% and digital cameras are forecasted to grow by 11% this year. Scalise cited continued price pressure in the memory sector as the principal reason for lowering the SIA sales forecast. “DRAM revenues declined by 34% even as unit shipments increased by more than 30% in the first four months of 2008 compared to the same period last year. A recent JPMorgan report projected a 65% increase in DRAM bit shipments in 2008. Memory products account for about 20% of total semiconductor sales,” Scalise said. Microprocessors, which account for roughly 14% of total semiconductor revenues, have experienced healthy unit sales growth to date in 2008, and revenues are expected to grow over 10% per year for the next two years. Analog products, which account for about 14% of total semiconductor demand, are expected to grow at a compounded annual growth of 5.3% over the forecast period. Consumer and communications applications continue to drive demand for these products. Logic products – including both standard and special-purpose logic – are expected to grow by 10.8% this year based on strong demand from a variety of end markets including consumer products. “Worldwide revenues will continue to grow throughout the forecast period, reaching historic highs each year,” said Scalise.