According to the Semiconductor Industry Association (SIA), global sales of semiconductors were severely impacted by the worldwide economic turmoil in 2008, resulting in the first year-on-year drop in sales since 2001. Total sales for 2008 were $248.6 billion compared to $255.6 billion in 2007, a decrease of 2.8%. Sales fell from $22.3 billion in December 2007 to $17.4 billion in December 2008, a decline of 22%. December sales declined by 16.6% compared to November 2008, when sales registered $20.9 billion.
“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,” said SIA President George Scalise. “Once again, the steepest revenue declines were in the memory sector, where price pressure more than offset significant growth in total bit shipments.”
Scalise continued, “As consumers worldwide drive over 50% 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 also said that sales of electronic products held up fairly well during the first nine months of 2008, but fell sharply as turmoil hit the global financial industry.
According to Scalise, “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.”
“The memory content of cell phones and PCs continued to increase dramatically driving large increases in total bit shipments,” he added. “Over the past 12 months, DRAM content of the typical PC grew by 44% to an average of 1.8 GB, while the NAND content of a typical cell phone increased by 244%. However, severe price pressure resulted in significant declines in revenues for these product lines.”