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Worldwide chip revenue plummets

Falling prices offset rising demand

Under pressure from falling prices, global semiconductor revenue fell to $20.09bn in February, down 6.5 percent from January, according to an industry report released yesterday.

Chip revenue was actually up 4.2 percent compared to February 2006, but it would have been much higher if low prices hadn't pulled the rug out from rising demand and unit sales, said the report from the Semiconductor Industry Association (SIA).

Compared to the same month last year, unit sales of microprocessors rose 8 percent but prices fell 15 percent, and unit sales of NAND flash chips rose 40 percent but their prices fell almost 50 percent.

"Year on year, we see evidence of the fiercely competitive market conditions - across the board unit sales in key products increased, while ASPs (average selling prices) declined," said SIA President George Scalise.

Geographically, the Americas showed the worst revenue slump, dropping 8.6 percent from February 2006 to February 2007, and Japan barely broke even with a 0.6 percent increase. Chip vendors relied almost entirely on a revenue increase of 7.2 percent in Europe and 10.1 percent in the Asia Pacific region, the SIA said.


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