Intense competition between microprocessor vendors led to a 6.1 per cent decline in sales revenue between March and April, despite decent growth in the rest of the semiconductor market.
The slump dragged the worldwide semiconductor market down from March revenues of $US19.7 billion to April revenue of $19.6 billion, according to a study released by the Semiconductor Industry Association (SIA).
The revenue drop could be the result of Intel and Advanced Micro Devices (AMD) cutting prices on current chips as they roll out products.
Still, the study offered hope for future growth. The market-wide April revenue figure marks an 8.1 per cent increase over the same month last year. And monthly PC sales climbed 13 per cent to 15 per cent compared to April 2005.
By comparison, market-leader Dell recorded a 10.2 per cent increase in PC shipments in Q1 2006 compared with the figure for Q1 2005. Second-place vendor, HP, grew 22.3 per cent over the same period, according to Gartner.
The overall market for semiconductors slumped because microprocessors were its largest single sector, at 14 per cent, SIA president, George Scalis, said.
Working against that trend, strong sales of consumer electronics drove the rest of the market to strong year-over-year increases.
Demand for wireless handsets sustained the market for analog electronics, digital signal processors, NOR flash and optoelectronic devices.
Meanwhile, the popularity of digital music players drove NAND flash to a 25 per cent increase, comparing April 2005 to April 2006. Digital music player sales grew at 50 per cent year over year.