Global Semiconductor Sales to Decline 1.8% in 1998

In its midyear forecast, the Semiconductor Industry Association (SIA) reported that an across-the-board drop in semiconductor sales during the first quarter of 1998 will lead to a decrease in year-end global semiconductor sales. According to SIA, year-end global semiconductor sales will drop 1.8% in 1998 to $134.6 billion.

SIA's midyear forecast was prepared by analysts at World Semiconductor Trade Statistics (WSTS). According to WSTS, first quarter semiconductor sales declined 10.2% in the Americas, 4.9% in Europe, 11.5% in Japan, and 9.7% in the Asia Pacific. The research agency says that these declines were caused by gradual slowing of the economy. WSTS also says that decreases resulted from pricing problems and oversupply in the memory chip industry.

"The financial turbulence in Asia and other markets changes has crimped the expected expansion of global chip markets in early 1998," says SIA president George Scalise.

Despite the drop in first quarter numbers, SIA still expects sales to pick up in the second half 1998. In addition, the organization claims that sales will exceed the industry's growth rates of 17% or more in 1999, 2000, and 2001.

"We expect the industry's expansion to occur in 1999 as semiconductor growth rates return to their historical averages of 17% or more," Scalise says.

WSTS says global semiconductor sales will increase 17.2% in 1999 to $157.7 billion, 18.5% in 2000 to $187 billion, and 18.9% in 2001 to $222.3 billion.