Chip sales down an astonishing 30% in February

San Jose (CA) – The Semiconductor Industry Association (SIA) sent out a sobering note today, indicating that the pace of declining chip sales is still accelerating. On a positive note, the organization mentioned that the decline is more moderate now.

Chip makers have been hit with one of the worst recessions in computer history, or, as the SIA calls it, one of the “steepest corrections” so far. Global chip sales were $14.2 billion in February down 7.6% from January and down 30.4% in January of 2008, when sales were $20.3 billion.

“While it would be premature to conclude that the sales decline has hit bottom, there are some indications that the rate of decline has moderated from the final quarter of 2008,” said SIA President George Scalise. The industry responded quickly to the changing market environment by curtailing production and reducing inventory as demand slowed in late 2008. The world’s two largest foundry manufacturers have recently reported slight improvements in factory utilization rates, albeit at levels well below those of a year ago,” Scalise continued.
Europe was hit the hardest, with a year-over-year decline of 36.1%, followed by Asia Pacific with 30.5%, Japan with 29.8% and the Americas with 24.9%. At least so far, the chip industry is still above the sales decline levels that were posted during the dotcom bust in 2001 and 2002. Back then, the drops exceeded 40%.