The global chip market has hit a rough patch with decreased sales being blamed on plummeting average selling prices (ASPs) in many key sectors.
Gartner has stated that declines in DRam prices and continued price competition in the computer microprocessing market has forced it to lower its 2007 market growth estimate to just 2.5 per cent, down from 6.4 per cent. Semiconductor sales in the first quarter of 2007 were more than five per cent lower than Q4 2006.
Richard Gordon, research vice-president at Gartner, said: “Since the beginning of this year, soft semiconductor market conditions have been exacerbated by sharply declining ASPs in key device markets such as DRam, MicroProcessor unit and application-specific standard products (ASSPs). It is likely that, despite continued unit growth in influential electronic systems markets, downward device ASP pressure will remain in place for much of 2007 as oversupplied semiconductor market conditions persist.”
The memory market is forecast to decline 4.7 per cent in 2007, thanks largely to a continued decline in DRam prices. Gartner’s latest forecast has DRam revenue dropping more than 11 per cent this year to $30.5bn, despite strengthening unit sales growth for the year. The DRam outlook for 2008 is also bleak, with a mild decline expected thanks to continued oversupply and depressed prices.
The SIA has just turned in its global chip sales revenues for April, which showed a 2.1 per cent dip over March, even though unit sales for the first four months of 2007 were up over the same period last year.
George Scalise, SIA president, said: “A very competitive semiconductor market, with declining ASPs in major industry segments, contributed to a sequential decline in worldwide chip sales. Several of the largest segments of the semiconductor market are experiencing ASPs that are declining more rapidly than historical patterns, offsetting growth in unit shipments.
“ASPs for microprocessors have been under pressure for the past year, as clearly shown during the first four months of this year. January to April sales were down by nearly two per cent from the same period of 2006, while unit shipments were up by nearly 10 per cent.”
As the trade war between the US and China ramps up, Marian McHugh investigates what impact this will have on UK prices and how partners are adapting to higher costs
CRN quizzes Avaya CEO Jim Chirico on the firm's progress after exiting Chapter 11 earlier this year, and listing on the stock exchange
Stampede becomes Exertis Pro AV Solutions
Revenues at Marlow-based reseller grow 30 per cent to £1.08bn, with profit increasing even more rapidly