Semiconductor market looking good for 2007
SIA reveals semiconductor sales increase over January 2006 led by sales of DRams
The semiconductor space has got off to a strong start in 2007 with January sales topping $21.47bn, up 9.2 per cent on sales of $19.66bn recorded for January 2006.
However, January’s sales dipped 1.2 per cent against the previous month, which the Semiconductor Industry Association (SIA) attributed to seasonal patterns. DRam continued to be the star seller, with revenues up 72 per cent year-on-year, while sales of notebooks and PCs were also strong.
George Scalise, president of the SIA, said: “January semiconductor sales reflected historical seasonal patterns, with strong year-on-year sales growth coupled with a modest sales sequential decline. The semiconductor industry continues to benefit from consumer confidence, which has been buoyed by recent gains in both personal and disposable income.”
He added that buyers of personal computers continued to reap large benefits from the steady decline in prices of semiconductors achieved through advances in technology. The average price of desktop and laptop computers declined by more than nine per cent in 2006, even as the speed and functionality of these systems were enhanced by more powerful chips.
“Sales of DRams led the industry both in total sales and in year-on-year growth in January,” he added. “With $3.6bn in sales in January, DRam revenues were up 72 per cent year-on-year and 2.3 per cent sequentially.
“The introduction of the Microsoft Vista operating system, which requires additional memory, may have contributed to the increase in demand.”
Market-watcher iSuppli has forecast that although 2007 will represent a marked slowdown in DRam growth and revenues, it will not be as poor as the disappointing 2005.
Global DRam revenues grew by 36 per cent last year, but this year growth will be just nine per cent. Average selling prices will drop by more than 30 per cent. Despite this, iSuppli has stated that memory makers are better equipped to deal with the slowdown, thanks to investment in different types of memory.
Nam Hyung Kim, director and principal analyst for memory ICs and storage systems at iSuppli, said: “DRam suppliers now have greater flexibility in their manufacturing allocation than they had two years ago. These companies have assigned capacity to other types of memory, such as Nand Flash, which can be easily swapped with DRam. This is predicted to prevent the rise of a major DRam oversupply.
“Also, in 2005 there were no significant events that encouraged consumers to buy more memory. With the release of Vista, consumers will be upgrading and buying new PCs.”