SAN JOSE – Worldwide sales of semiconductors rose to $18 billion in July, up 0.3% over June but down 0.03% from July 2004, the Semiconductor Industry Association reported today. Prices fell despite slight unit growth.
“Strong competition contributed to declining prices for semiconductors, which resulted in nominal growth on higher unit sales in July,” said SIA president George Scalise, in a press statement. “Although unit sales of personal computers and cellphones are running well ahead of earlier projections, a very competitive market has resulted in substantial price attrition.”

Scalise noted that the Gartner Group is projecting PC prices will decline approximately 13% this year. Pathfinder Research projects an even more dramatic 25%  decline in prices for desktops. Prices for cellphones are also declining in the face of strong competition.

“The overall economic outlook remains strong, despite recent dramatic increases in energy prices, and this bodes well for semiconductor sales for the remainder of 2005,” Scalise continued. “However there is some concern that high energy costs will impact sales of electronic consumer products if they continue to rise unabated."

Semiconductor sales declined sequentially in all geographic regions except the Asia-Pacific region, which grew by 8.1%.

Capacity utilization continued to improve, with overall utilization rising to 89% in the second quarter. Capacity utilization is expected to continue to improve in the current quarter.

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