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World chip sales down 7% in May

US takes brunt of sales tumble

Chip prices continued to fall in May, with worldwide revenue dropping seven per cent.

Around $12.7 billion worth of chips were sold during the month, compared to $13.7 billion in April. This represented a 20 per cent drop on May 2000, according to figures from the Semiconductor Industry Association.

The US was hit hardest, with sales down 11 per cent on a month-by-month basis to $3.3 billion.

Sales tumbled eight per cent to $2.8 billion in Europe, six per cent to $3.2 billion in Japan, and five per cent to $3.4 billion in Asia Pacific. Compared to the previous year, revenue dropped 32 per cent, 17 per cent, 11 per cent and 17 per cent respectively.

This was the seventh consecutive month for falling semiconductor sales, with revenue plummeting to September 1999 levels.

"The sales for May reflect the current inventory overhang that the semiconductor industry has been experiencing since November," said SIA president George Scalise.

"We continue to believe that the industry will begin to see the final phases of the inventory correction late in the third quarter with a broad-based sequential recovery commencing in the fourth quarter," he added.

Last month IDC forecast DRAM sales would drop 46 per cent this year to $16 billion, from $29 billion the previous year. IDC analysts said they didn't expect chip sales to beat last year's total until 2005. ®

Related Link

SIA report

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