Chip sales fell 37% in July – SIA

Weren't they supposed to have been improving by now?

If the world's semiconductor companies are expecting the depressed chip market to cheer up this quarter, they had better start selling some product. Fast.

According to the Semiconductor Industry Association, chip sales in July were down a massive 37 per cent year-on-year. Some $10.86 billion worth of semiconductors were sold during July 2001, well down on July 2000's figure or $17.29 billion.

July's sales were even down on June's $11.60 billion, the last month of what the chip industry regards as its worse three-month period, Q2 2001. July's sales were 6.4 per cent on June's, themselves 8.8 per cent down on May's sales of $12.71 billion.

That might suggest the decline is slowing. But June's sales were down 30.7 per cent year on year, compared to July's fall of 37 per cent, which might imply a worsening of the situation. We'll need to see August's figures before we can be sure - the SIA isn't expected to collate and release them until early next month.

A ray of hope shone by the SIA is that customers' efforts to trim inventories should be completed this quarter, paving the way for renewed sales in the three months to 30 December. Of course, all this was supposed to have happened already, in the second quarter, and the extent of July's decline in sales means that demand is growing to have to grow significantly if the industry is going to end the year on a positive note. ®