Semiconductor sales down

Attrition in the DRam market is being blamed for a dip in semiconductor revenues for May, according to the latest figures from the Semiconductor Industry Association (SIA).

Worldwide sales of semiconductors fell slightly in May to $18.05bn, a sequential decline of 0.5 per cent from the $18.14bn reported in April. May sales were up 4.1 per cent though from the $17.34bn reported for May 2004.

SIA president George Scalise said: “Attrition in DRam prices, which saw a sequential decline of six per cent, was the major contributing factor in a slight decline in worldwide semiconductor sales in May. DRams are one of the largest segments of the total semiconductor market, consequently price swings in this segment have a large impact on total chip sales.”

Paul Stevens, director at Memory Plus, said: “There has been a lot of competition out there from Taiwanese and other Far East suppliers. Most of the big manufacturers have been running at a loss – or very close to a loss – which is why a lot of their Fabs have moved to Nand Flash production.”

This month will also see the major players increase the price of DRam, which has been falling recently.

Stevens said: “Samsung, Micron and Infineon have now started to put their contract prices up for the first time for at least six months. OEMs are trying to fight a $0.50 rise, but it could be higher.”

Market watchers, DrameXchange, said that manufacturers suffered during the sharp price drops of Q2 and are now aiming to up double data rate (DDR) 256MB pricing by $1 to $1.50, a 5-7 per cent hike. DDR2 module prices are also expected to rise by as much as five per cent.