Chip industry revenues fall by 6.5%

Under pressure from falling prices, global semiconductor revenue fell to £10.4bn in February, down 6.5% from January, according to an industry report.

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Under pressure from falling prices, global semiconductor revenue fell to £10.4bn in February, down 6.5% from January, according to an industry report.

Chip revenue was actually up 4.2% compared to February 2006, but it would have been much higher if low prices had not pulled the rug out from rising demand and unit sales, said the report from the Semiconductor Industry Association (SIA).

Compared to the same month last year, unit sales of microprocessors rose 8% but prices fell 15%, and unit sales of NAND flash chips rose 40% but their prices fell almost 50%.

"Year on year, we see evidence of the fiercely competitive market conditions -- across the board unit sales in key products increased, while ASPs declined," said SIA President George Scalise, referring to average selling prices.

Geographically, the Americas showed the worst revenue slump, dropping 8.6% from February 2006 to February 2007, and Japan barely broke even with an 0.6% increase. Chip vendors relied almost entirely on a revenue increase of 7.2% in Europe and 10.1% in the Asia Pacific region, the SIA said.

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