Worldwide Chip Sales in May Grew by 2.4 Percent from 2006

Business Wire, July 2, 2007

Sales Increased by 1.2 percent from April

SAN JOSE, Calif. -- Worldwide sales of semiconductors of $20.3 billion in May were 2.4 percent higher than the $19.8 billion reported for May of 2006, and 1.2 percent higher than the $20.0 billion reported for April 2007, the Semiconductor Industry Association (SIA) reported today.

"Worldwide sales of semiconductors rebounded slightly in May, after a sequential decline in April," said SIA President George Scalise. "Sales of microprocessors and NAND flash memory saw the largest sales increases, indicating continued strength in end markets for personal computers and cell phones. Average selling prices (ASPs) for DRAMs continued to be under competitive pressure, declining by nearly 14 percent sequentially. Total DRAM sales fell 8 percent even as unit shipments increased by 7 percent.

"Unit sales of both personal computers and cell phones have increased in line with forecasted growth rates in the 10 percent range, but the memory content of these products is growing dramatically," Scalise continued. "According to Micron Technology, the average DRAM content of a PC will increase from 772 MB last year to 1,180 MB this year - an increase of 53 percent. The embedded memory content of cell phones is growing even more dramatically: the NAND flash content of the typical cell phone is expected to grow at a compound annual rate of more than 200 percent through 2010."

SIA noted that unit sales of digital signal processors (DSPs) grew by slightly more than 5 percent sequentially, indicating that cell phone inventory issues have been resolved. ASPs were down by nearly 1 percent sequentially while unit sales grew by just over 5 percent, for an increase of 4.3 percent.

"Despite severe price pressures on DRAMs and NAND flash, total sales of semiconductors for the first five months of 2007 increased by 3.1 percent from the same period of 2006," Scalise concluded.

About the SIA Global Sales Report

The SIA Global Sales Report (GSR) is a three-month moving average of sales activity. The GSR is tabulated by the World Semiconductor Trade Statistics (WSTS) organization, which represents approximately 66 companies. The moving average is a mathematical smoothing technique that mitigates variations due to companies' financial calendars.

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About the SIA

The SIA is the leading voice for the semiconductor industry and has represented U.S. semiconductor companies since 1977. Collectively, the chip industry employs a domestic workforce of 232,000 people. More information about the SIA can be found at www.sia-online.org.