Worldwide sales of semiconductors in April fell 10.2 per cent, or roughly $US1.56 billion, compared to the same time in 2000, a new Semiconductor Industry Association (SIA) study said.
Worldwide chip sales for April totaled $13.72 billion compared to $15.28 billion for the same month last year, according to the study. Slower demand for semiconductors continues to reflect the industry inventory correction that started in the fourth quarter 2000, said SIA president George Scalise, in a prepared statement.
Semiconductor inventory problems lean more toward chips used in cellular phones, LAN (local area network) switches, hubs, routers and network backbones, said Sherry Garber, a senior vice president at Semico Research. Many chip manufacturers built up their production to increase their output when the dot-com and venture capital glory days were going strong, she said.
One glimmer of optimism in April was that chip sales rose 3.4 percent to $3.54 billion in Asia/Pacific on a month-to-month basis. However, chip sales were still off 8.8 per cent compared to the year before when sales hit $3.88 billion for April, according to the study.
The market started to slow during the third quarter 2000, and it has taken time for the semiconductor industry to apply the brakes to slow chip output, Garber said.
"We think the PC industry is in pretty good shape," she said. "But we are waiting for the communication industry to see exactly how their inventory is. We think it could take as long as until the fourth quarter (for the market to improve). We are certainly optimistic for the back-to-school PC sales. That certainly should stimulate some sales." US schools typically return from their summer break in late August and early September.
Last week, the World Semiconductor Trade Statistics (WSTS) group said the world's semiconductor market would decline 13.5 per cent in 2001 with the Americas and the Asia/Pacific chip markets taking a good portion of the brunt of the sales downturn. According to the WSTS, the semiconductor market will drop to US$176.8 billion in 2001 from $204.4 billion in 2000.
Year-over-year, the Americas experienced the worst sales regionally, with a drop of 19.1 per cent for April compared to the same month last year. Sales in the Americas were $3.75 billion compared to $4.64 billion for the same time last year.