Price Pressure Mounts for Chips

July semiconductor sales were off slightly from a year earlier.
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Price pressure is playing a larger role in holding back growth for semiconductors, according to new data from an industry trade group.

"Although unit sales of personal computers and cell phones are running well ahead of earlier projections, a very competitive market has resulted in substantial price attrition," said George Scalise, president of the

Semiconductor Industry Association

.

His comments referenced a report that July semiconductor sales were $18.01 billion, up 0.3% from June and down 0.03% from July last year.

Sales rose year-over-year in the Asia-Pacific region by 8.1%, but dropped in all other regions. Capacity utilization improved to 89% for the second quarter, with improvement expected in the third quarter.

Scalise cited steep price declines for personal computers as a major driver of semiconductor price pressure, something that

Dell

(DELL) - Get Report

,

Hewlett-Packard

(HPQ) - Get Report

and

Gateway

(GTW)

all

referenced during their financial reports.

He also repeated his concern that high energy prices could hurt consumer spending for electronic products. Overall, though, he said the "economic outlook remains strong."