Global chip sales slow down

Chip revenues increased just 0.2 per cent in the first 11 months of 2008

The semiconductor market has become the latest branch of the tech sector to be rocked by the slow economy.

The Semiconductor Industry Association (SIA) estimated in a recent report that revenues in November dropped by some 9.8 per cent from a year ago.

Overall worldwide semiconductor sales for the month fell to $20.8bn (£14.3bn), a drop of $2.3bn (£1.58bn) over the same month in 2007. The figures also represented a decline of 7.2 per cent from October 2008.

The slow month puts a damper on the yearly figures, showing an increase in revenues of just 0.2 per cent for the first 11 months of 2008.

While some prominent chipmakers such as Micron and Freescale have had to close factories and cut staff, SIA president George Scalise remained optimistic that the industry would see a relatively low impact from the recession.

"The worldwide economic crisis is having an impact on demand for semiconductors, but to a lesser degree than some other major industry sectors," he said. "We expect that the industry will remain the second largest exporter in the US for 2008."

Much of the decrease was attributed to particularly slow sales for memory chips. The market has slumped for more than a year, and some in the industry predict a major round of company closures and consolidation in the coming months.