LONDON – Global chip sales in the second quarter were down 2 percent compared to equivalent figure in the previous quarter and down 0.5 percent from the second quarter in 2010, according to the Semiconductor Industry Association (SIA).
The declining sales are partly due to a sharp decline in Japan as it continues to try and rebuild after the devastating earthquake and tsunami of March 2011.
The three-month average of worldwide sales of semiconductors was $24.68 billion in June 2011. This is a 1.5 percent decrease from the prior month's three-month average when sales were $25.04 billion and 0.5 percent decrease from a year ago.
Over the last decade global second quarter chip sales have typically been up on first quarter sales by 2 or 3 percent so a 2 percent decline appears to show evidence of marked turn around compared with the strength of the first quarter.
There is evidence that a slowdown in Japan has contributed the slowing sales. All the regions that the SIA and World Semiconductor Trade Statistics follow experienced growth for the year to date over last year, except Japan, the SIA observed.
The SIA said that corporate PC refresh cycle, smartphone demand and spending on IT infrastructure is being offset by a weak consumer demand.
"Overall semiconductor sales are on track with growth projections of 5.4 percent growth for 2011," said Brian Toohey, president of the SIA, in a statement.
The SIA and the European Semiconductor Industry Association publish monthly data as three-month-average figures. This makes the sales of any given month the average of the sales for that month and the previous two months. The SIA and ESIA prefer to present this data as it smoothes out the actual data that usually show troughs at the beginnings of the quarters and peaks at the ends of the quarters.
Maybe as well on top of very detailled explanation from peter should we integrate more structural reasons. when we look at the market there is part of it having a big growth like tablets for instance but this is at the detriment of netbook so overall the growth is strongly reduced. THe same type of phenomena happens in mobile phones where smartphones are eating part of the feature phone market. Even if growth is there in these segments some signs shows here and there that overall it is may be not so important as expected. The last point is really the real consumer demand as there is today no real breakthrough in technology that really justify very strong sales on top of the ones of taoday as it was the case with mobile phones, digital TV's, DVD recorders,...
Once you have a smartphone with touch screen HD video capability and 3G+ capacity what is the next feature which will justify you will buy a new one and replace the current one? This could be as well even reinforce wiht the application store story allowing you to create a complete environment on your device, thanks to application downloading. Once you have a working and well suited environment, you don't want to loose it and to reinstall on a new device if you are not forced to do it.SO as a concluson I think that yes economical conditions are a reason of slowdown but there is maybe others which have nothing to do with pure economic.
Apart from suffering the shocking catastrophe itself, Japan has probably suffered a quarter of stiffled demand as the country has been operating in "emergency" mode. However, at some point the rebuilding mode becomes the more significant and produces elevated demand.
Of course the inhibition of an emergency and the stimulus of rebuilding can co-exist in different sectors and different geographies.
So the gross effect depends when one surpasses the other. Let me have a think.
Well the slowdown may be relieved at some point; there is a natural periodicity to economic oscillations at different levels. But as to the U.S. debt crisis itself: which could be bracketed with a western hemisphere debt crisis in general: the impact will surely last at least a decade.
I think it must be born in mind that many finesses and economic sleights of hand are possible when a country is the world's largest economic power and its currency is a defacto global currency.
When there are other currencies of equal weight in the world and of greater attractiveness the rules change. And unwinding the positions taken previously can take time.