With the major drivers for semiconductor demand remaining strong in 2007, namely PCs, mobile handsets, and consumer electronics, global sales of semiconductors grew for the sixth consecutive year and reached a record $255.6 billion in 2007, up 3.2% from $247.7 billion in 2006, according to the Semiconductor Industry Association (SIA) today.
December 2007 worldwide sales were $22.3 billion, up a modest 2.5% compared to $21.7 billion in December 2006. On a sequential basis, December 2007 sales declined by 3.6% from November 2007 sales of $23.1 billion, reflecting what the SIA reminded is a normal seasonal pattern.
Q4 2007 worldwide sales rose 2.5% year-over-year to $66.8 billion, from $65.2 billion in Q4 2006.
Shipments of PCs, which accounted for approximately 40% of all semiconductor consumption, grew by 13.8% in 2007 and is expected to grow by 12.2% this year, according to JPMorgan, while mobile PC unit sales grew 32.2% while desktop unit sales grew by 4.1%. Cell phone unit shipments grew by 20% to nearly 1.2 billion units in 2007, with current forecasts projecting 10 to 15% growth in unit shipments this year.
SIA president George Scalise said in a statement regarding the results, “Traditional consumer electronics are also experiencing healthy growth. MP3/PMP player unit sales continue to grow at nearly 20% a year. LCD TV units grew by more than 50%, and digital camera units grew by 20%.”
However, the memory sector reflected the strong pricing pressures that prevailed throughout last year as average selling prices (ASPs) for both DRAMs and NAND flash declined precipitously through the year.
Total industry sales, excluding memory products, were up by 4.5% year-over-year.
Although total bit shipments for DRAMs nearly doubled in 2007, total revenues declined by 7.4% due to a decline of more than 39% in ASPs. NAND flash revenues were up 26% but unit shipments grew at nearly 46%, while ASPs declined by 13.7%
Scalise argued, “Industry revenue figures tend to mask the growing pervasiveness and economic contributions of semiconductors. The most dramatic example of how advances in chip technology are benefiting consumers is the enormous increase in performance of a typical PC system coupled with a steep decline in prices, primarily driven by semiconductors that are faster, smaller, and cheaper every year. The typical desktop system of 2007 was at least 100 times more powerful than the typical system of 1997 but cost only about one-third as much -- $630 in 2007 compared to $1,833 in 1997. Rapidly declining prices coupled with increases in performance and functionality provide consumers with additional computing power at lower prices resulting in higher productivity.”
In conclusion, Scalise maintained, “The past year was another good year for the global semiconductor industry, despite concerns about steep increases in energy costs and the sub-prime mortgage problem. Based on the outlook for key demand drivers, we believe our forecast for 7.7% industry growth for 2008 is realistic.”
