Stronger-than-expected PC sales have helped boost worldwide semiconductor sales

The Semiconductor Industry Association (SIA) has reported that healthy PC sales bumped up sales of chips in October. Sales topped $23.1bn (£11.3bn), an increase of five per cent over the $22bn reported in October 2006 and two per cent higher than the $22.6bn recorded for September this year.

Sales for the first 10 months totalled $210.5bn, 3.9 per cent ahead of the same period in 2006, when sales hit $202.6bn. The sales are in line with the SIA’s forecast for overall 2007 sales growth of 3.8 per cent.

“Consumers are reaping huge benefits from continued rapid price attrition in key sectors of the semiconductor market,” explained SIA president, George Scalise.

“Despite a 55 per cent year-to-date increase in unit shipments, DRam turnover is up only four per cent
over January through to October 2006 sales.”

Scalise continued: “The story is similar in the microprocessor sector. Strong unit demand for PCs has driven a 15 per cent increase in unit sales of microprocessors for the first 10 months of 2007, compared with the same period of 2006.

“Revenues, however, are up only four per cent compared with last year, due to price attrition. Today’s typical PC costs less than a third of the typical unit of a decade ago, but is 100 times more powerful due to continuing advances in semiconductor technology that have driven down costs while significantly enhancing the speed, capacity and performance of the chips that go into computers.”

DRam prices are expected to remain depressed until early 2008, when they will start to recover, but many DRam manufacturers are still reporting losses.

Japanese company Elpida has warned that it expects to take a loss in its forthcoming financial results, thanks to weak DRam pricing.

Yukio Sakamoto, Elpida’s president, said: “DRam price falls have hit bottom. It will probably be a small loss.”