The worldwide economic turmoil caused an immediate impact on sales of chips that go into everything electronic. Global semiconductor sales fell 9.8 percent in November compared to a year ago, according to the Semiconductor Industry Association.
Sales were $20.8 billion in November, compared to $23.1 billion a year ago. November’s sales were down 7.2 percent from $22.4 billion in October. Year to date, sales for the first 11 months of 2008 were $232.7 billion, up only 0.2 percent. The SIA numbers are closely watched in the semiconductor industry.
The industry often notes the sales figures excluding memory chip sales, which are are volatile. On that basis, sales declined 4.8 percent to $17.3 billion in November from $18.2 billion a year earlier. Excluding memory, year-to-date sales are up 5.6 percent. Memory is in a funk this year because of over-capacity for the biggest categories of memory, flash and dynamic random access memory.
George Scalise, president of the SIA, said that chip sales have been hurt by the crisis but not as bad as some other industry sectors. Scalise said that Congress should quickly pass legislation to strenghthen consumer confidence and spur investment. In November, the SIA predicted that chip sales would fall 5.6 percent in 2009, the first time there has been a year-to-year decline since 2001. But the decline is not expected to be as bad as when that year when the industry fell 30 percent.
Look for plenty of dips in the monthly SIA numbers going forward, mainly because chip sales are a lagging indicator, as many chips are built well in advance of product sales.