SAN JOSE, CA – Worldwide economic turmoil in 2008 severely impacted global semiconductor sales, resulting in the first year-on-year drop in sales since 2001, the Semiconductor Industry Association reported today.
 
Total sales for the year were $248.6 billion, down 2.8% compared to 2007. 
 
December 2008 sales were $17.4 billion, down 22% year-over-year. December sales declined 16.6% sequentially.
 
“The global economic recession severely dampened semiconductor sales in the fourth quarter of 2008, historically a strong quarter for the industry,” said SIA president George Scalise. “Weakening demand for the major drivers of semiconductor sales – including automotive products, personal computers, cellphones and corporate information technology products – resulted in a sharp drop in industry sales that affected nearly all product lines. Once again, the steepest revenue declines were in the memory sector, where price pressure more than offset significant growth in total bit shipments.
 
“As consumers worldwide drive over 50% of demand for semiconductors, the fortunes of the chip industry are increasingly linked to macroeconomic conditions such as GDP, consumer confidence, and disposable income,” Scalise continued. “Sales of electronic products held up reasonably well during the first nine months of 2008, but fell sharply as turmoil in the global financial industry unfolded.
 
“The memory content of cellphones and PCs continued to increase dramatically, driving large increases in total bit shipments. Over the past 12 months, DRAM content of the typical PC grew by 44% to an average of 1.8 Gb, while the NAND content of a typical cellphone increased by 244%. However, severe price pressure resulted in significant declines in revenues for these product lines,” Scalise said.