Chip sales show signs of stabilizing

Analysts are expecting sales of semiconductors in April to show signs of stability, indicating a faint light at the end of a long economic tunnel.

According to Bruce Diesen, senior analyst at Carnegie Securities Research, better prices for memory chips and volumes for PCs, car electronics and handsets will show signs of improvement after the truly awful 32 percent drop in March 2009.

Diesen said: “In this down cycle, wafer starts are fallinChig much more than dollar chip sales, which is highly unusual, but points to a potentially bigger inventory rebound.” Afer prices are not falling as they did in 2001, said Diesen. The large cuts in production are overstating the price change.

While Chinese handset exports fell six percent in April, year on year, the position is better for some other categories. Korean memory chip exports improved in April, while Japanese semiconductor exports rebounded strongly in the month.

Russia may be particularly hard hit however – tech spending has really slowed down. Chip giants Texas Instruments (TI) and Intel are the biggest exporters of components and other elements of semiconductor production and April showed a rise there too.

However, and as indicated by Applied Materials latest final results, capital expenditure orders fell 77 per cent in April.

The World Semiconductor Trade Statistics will be released on the 30th of May.