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Global chip sales shriveled in 2008

First shrinkage since bursting bubble

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Last year was the first since 2001 that saw a year-on-year drop in chip sales, according to the Semiconductor Industry Association (SIA).

2001 was the year that the dot com bubble burst. 2008 was the year the Meltdown began - and the SIA's numbers indicate the melting accelerated as the year wore on.

Worldwide semiconductor sales declined from $255.6bn (£179.0bn) in 2007 to $248.6bn (£174.1bn) in 2008 - a drop of 2.8 per cent. That slide, however, was gentle compared to the year-on-year plunge from December 2007 to December 2008, which saw a 22 per cent roller-coaster ride from $22.3bn (£15.6bn) to $17.4bn (£12.2bn).

December 2008 was a terrible month. The decline from November 2008, when sales were a comparatively healthy $20.9bn (£14.7bn), was a full 16.6 percent.

And the chipmaker's life is worse in Europe and the US than it is in Asia. Europe's 2008 sales sank 27.8 per cent while America's dropped 26.2 per cent. Japan, on the other hand, looked positively prosperous by comparison, dropping only 13.2 per cent year-on-year.

But even Japan is increasingly feeling the heat of the Meltdown. Witness, for example, NEC's recent decision to cut 20,000 jobs in its next fiscal year.

SIA President George Scalise blamed the meltiness on "Weakening demand for the major drivers of semiconductor sales," which "resulted in a sharp drop in industry sales that affected nearly all product lines."

"The industry is currently facing an unprecedented period of uncertainty," said Scalise.

Of that, we're certain. ®

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