Alexei Oreskovic
A semiconductor trade group said worldwide chip sales in July rose moderately from the month before, but its latest appraisal suggests annual sales might fall short of expectations, as fierce price-cutting by microprocessor vendors and inventory overhangs limit the industry's revenue growth.
Instead of the roughly 10% annual growth rate that the Semiconductor Industry Association projected only two months ago, the group now seems to have pulled back its forecast to 6% growth. "The worldwide semiconductor industry is on track to surpass $240 billion in sales this year, which represents a new record," SIA President George Scalise said in a statement. But that figure is significantly less than the SIA's previously stated forecast for 2006 which calls for annual sales of $249.6 billion, up 9.8% year over year, and Scalise notably did not reaffirm that guidance in Friday's announcement. The SIA bumped up its 2006 forecast in June, from its earlier projection of $245 billion, a 7.9% increase from the year before. Scalise said growth continues to be strong across a broad range of end markets and geographic regions. Sales in Asia Pacific grew 13% year over year in July, while the sales in the U.S. were up nearly 18% compared to the year-ago period. Total chip sales in July reached $20.1 billion, up 11.5% from the year before and 1.8% from June 2006.
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