Chip sales growth last month of 1.6% masks plunge in memory prices

Chip sales worldwide grew to $23 billion in September, up 1.1% from the month before and 1.6 percent higher than September 2007, according to the Semiconductor Industry Association. That was the lowest sequential growth in three months and the smallest year-over-year gain in seven months.

The sales figures were dragged down by a 37.5 plunge in the value of flash memory sales in September compared to the year before, as well as an 11.1 percent decline in DRAMs. Excluding those two categores, sales would have been up 7.8 percent.

“The rate of semiconductor sales growth slowed in September as the industry began to feel the effects of the turmoil in world financial markets,” said SIA President George Scalise. “We face a near-term period of uncertainty with a steep decline in consumer confidence and caution in the enterprise segment.”

Scalise pointed to the fact that consumer confidence in the U.S. reached a record low in September, as measured by the Conference Board.

“The picture is somewhat brighter in emerging markets,” Scalise continued. “Sales of personal computers and cell phones – the two largest drivers of semiconductor sales – remain strong in these emerging markets, driven by growing consumer populations and rising income levels coupled with more affordable pricing. Economic growth in major developing countries is still high in mid- to high-single digits, albeit below recent peaks.”

Little wonder that Intel announced an agreement with Taiwan’s Ministry of Economic Affairs to establish an “enabling” center in that country for Mobline, the open source project launched by Intel that’s focused on building a Linux-based platform for the next generation of mobile devices. The world’s largest chip maker also said it’s venture arm, Intel Capital, would invest $11.5 million in Taiwanese carrier VMAX to help it deploy Taiwan’s first WiMAX network.


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