Chips Take July For $20B

Semiconductor sales rallied to $20.1 billion in July, an 11.5 percent from
July 2005, said the Semiconductor Industry Association (SIA) in its latest
report.

The July sales were a small increase of 1.8 percent from the $19.8 billion
in sales reported in June 2006.

SIA President George Scalise said consumer purchasing patterns account for
the semiconductor market’s year-over-year surge.

“July sales reflect the historical pattern for the industry, with growth in
unit demand coupled with declining average selling prices,” Scalise said.
“This trend helps make possible the very attractive prices for many consumer
products.”

For example, the average selling price for a PC declined by approximately 7
percent year over year, while computer products represent over 40 percent of
demand for semiconductors.

The worldwide semiconductor market is on track to surpass $240 billion in
sales this year, which represents a new record, according to Scalise.

“Growth continues to be strong across a broad range of end markets and
geographic regions, as well, particularly Asia-Pacific, which is up over 13
percent year on year, and the U.S. where sales increased almost 18 percent
over last year,” Scalise said in a statement.

While consumers are credited with carrying the market, advancements in
dual-core technologies from Intel and AMD should have an impact in the
coming months.

SIA’s report comes on the heels of recent dual-core server chip
announcements from both Intel and AMD.

AMD unleashed its latest Rev F Opteron dual-core processor for servers and workstations;
Intel later launched
servers with its Tulsa Xeon 7100 series processors.

While it is too soon to know what effect these new dual-core offerings will
have on market revenues, they symbolize the innovation that is prompting
corporations to buy newer, multi-core servers.

Meanwhile, Scalise also noted that capital spending in 2006 is expected to
amount to approximately 22 percent of semiconductor sales, which is in line
with anticipated technology requirements and anticipated sales growth.