Chip sales slow down

The semiconductor market has become the latest branch of the tech sector to be rocked by the slow economy.

The Semiconductor Industry Association (SIA) estimated in a recent report that in the month of November revenues dropped by some 9.8 per cent from a year ago.

Overall, worldwide semiconductor sales for the month dropped to US$20.8bn, a drop of US$2.3bn over the same month in 2007. The figures were also a decline of US7.2 per cent from October of 2008.

The slow month puts a damper on yearly figures, giving the industry as a whole a 0.2 increase in revenues for the first 11 months of 2008.

Though some prominent chipmakers such as Micron and Freescale have had to close factories and cut staff, SIA president George Scalise remained optimistic that the industry would see a relatively low impact from the recession.

"The worldwide economic crisis is having an impact on demand for semiconductors, but to a lesser degree than some other major industry sectors," he said.

"We expect the industry will remain the second largest exporter in the U.S. for 2008"

Much of the decrease was attributed to particularly slow sales for memory chips. The market has seen sales slump for more than a year and some within the industry predict a major round of company die-offs and consolidation in the coming months.