Worldwide sales of semiconductors increased by one percent in March to $20.3 billion compared with the previous month, and are 3.2 percent better than the $19.7 billion reported for March 2006, according to the the Semiconductor Industry Association (SIA).
The increase reverses three months of sequential declines recorded by the SIA (San Jose, Calif.).
The organization says price pressures resulting from intense competition in major market segments such as DRAMs, DSPs and NAND flash limited industry growth despite higher unit shipments for these products in March.
DRAM sales declined by just over 8 percent from the last quarter of 2006, reflecting strong pricing pressure as units increased over 16 percent while average sales prices dipped close to 20 percent over the same time period.
Microprocessor revenues declined by nearly 13 percent from the prior quarter, reflecting a decline in unit sales while average sales prices remained almost unchanged.
First-quarter global chip sales reached $61.0 billion, a 3.2 percent increase from the $59.1 billion reported for the first quarter of 2006. Sales declined by 6.5 percent in the first quarter of 2007 compared to the $65.2 billion reported for the final quarter of 2006.
"Even with continued strength in unit sales of personal computers, mobile phones, and other portable consumer electronic products, an abundant supply of chips for these applications resulted in declining average selling prices as manufacturers sought to hold onto market share," commented George Scalise, SIA president.
"The competitive pressures we have seen in the semiconductor industry over the past few months have led to record low prices for PCs — the average sales price for a consumer PC fell to $850 in the first quarter," Scalise added.
Sales for the year so far are running slightly ahead of last year's record level, but well short of the 10 percent growth projected in the forecast issued by SIA last November. "Semiconductor sales are increasingly tied to worldwide economic performance and consumer confidence," Scalise said.
The SIA plans to provide an updated industry forecast on June 13.