Strong Chip Sales Noted in First Half of 2008 as Memory Prices Plunge


The next time anyone tells you that PCs will soon become obsolete in a world filled with media centers and gaming consoles, feel free to give them a wedgie. And while you're tugging at their skivvies, be sure and let them know the real truth about PC sales, which are not only in no danger of disappearing, but are boasting stronger than expected sales .

"How strong?," the wedgie recipient asks, appearing more surprised at the news than he is of his underwear being pulled higher than it every has been before.

Tell him $127 billion, which represents global semiconductor chip sales for the first half of 2008, or 5.4 percent above the H1 2001 result. Then let him know that June 2008 sales climbed 8 percent from June 2007's numbers, settling in at $21.6 billion compared to $20 billion.

"That's impressive," he says as you gently ease him back to the ground.

Yes it is.

Pushing the higher than expected numbers is a growing demand for notebooks, with computers in general consuming about 40 percent of semiconductors produced worldwide. The other big player is the cell phone industry, which accounts for roughly 20 percent of chips sold. The future looks bright too, with emerging markets expected to account for half of worldwide PC sales. But while PC makers are cheering, memory products continue to struggle noting a 6 percent year-on-year decline.

"Advances in semiconductor technology continue to deliver huge benefits to consumers, as semiconductor devices deliver higher performance and increased functionality at lower cost, " said George Scalise, president of the Semiconductor Industry Association (SIA). "At the same time, rapid price declines for microchips tend to mask the real growth of the industry. The cost of 1GB of DRAM has declined by as much as 43 percent during the past year, while the price of 2GB of NAND flash has declined by as much as 61 percent in the last 12 months."

And according to market research firm iSuppli, the situation with memory pricing doesn't look to change anytime soon. It might be late 2009 before DRAM manufacturers see a recovery.

Image Credit: Flickr sweska

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