September Chip Sales Remained Strong at $21.4 Billion

SAN JOSE, Calif.—(BUSINESS WIRE)—November 2, 2006— "Worldwide sales of semiconductors in September once again achieved a new high as electronic equipment manufacturers geared up for the fourth-quarter holiday season," said George Scalise, president of the Semiconductor Industry Association (SIA). "Global chip sales rose to $21.4 billion, an increase of 9.3 percent from September 2005, and a 4.2 increase from the $20.5 billion reported in August 2006. Strong demand for consumer products, including cell phones, MP3 players, and personal computers were major drivers of increased chip sales."

Global semiconductor sales in the third quarter of 2006 were $64.1 billion compared to $59.3 billion in the second quarter of this year, an increase of 8 percent. For the first nine months of 2006, sales totaled $154 billion -- an increase of 8.5 percent from the $142 billion reported for the first nine months of 2005.

"Sales of cellular telephones remained strong, especially in India and China," said Scalise. "PC manufacturers are now producing systems designed for the new Windows Vista operating system, which is contributing to strong demand for DRAMs. DRAM sales increased by 10 percent sequentially and 40 percent from September 2005, reflecting growth in bit demand and tightening supply. Microprocessor sales increased by 4 percent from August of this year, while declining by 11 percent from August 2005. The year-on-year decline in microprocessor sales can be attributed to price competition as unit sales rose."

"With prospects for healthy sales in the seasonally strong fourth quarter driven by strong consumer demand, the industry is on pace to meet our mid-year forecast of 9.8 percent sales growth for 2006," Scalise concluded. SIA will release a new industry forecast for 2006 through 2009 on November 16.

According to VLSI Research, capacity utilization should grow to around 95 percent for the remainder of 2006, an increase from the second-quarter utilization rate of 92 percent. Sales grew in all geographic regions in September.
Market                      Last Month   Current Month       % Change
-------------------------------------- --------------- ---------------
Americas                         3.83            3.89             1.8%
-------------------------------------- --------------- ---------------
Europe                           3.21            3.41             6.4%
-------------------------------------- --------------- ---------------
Japan                            3.92            4.05             3.3%
-------------------------------------- --------------- ---------------
Asia Pacific                     9.56           10.02             4.8%
-------------------------------------- --------------- ---------------
Total                           20.51           21.37             4.2%
-------------------------------------- --------------- ---------------

                       --------------- --------------- ---------------
Year-to-Year Sales

Market                       Last Year   Current Month       % Change
-------------------------------------- --------------- ---------------
Americas                         3.45            3.89            12.9%
-------------------------------------- --------------- ---------------
Europe                           3.29            3.41             3.7%
-------------------------------------- --------------- ---------------
Japan                            3.70            4.05             9.4%
-------------------------------------- --------------- ---------------
Asia Pacific                     9.12           10.02             9.8%
-------------------------------------- --------------- ---------------
Total                           19.56           21.37             9.3%
-------------------------------------- --------------- ---------------

                       --------------- --------------- ---------------
Three-Month-Moving Average Sales

Market                 Apr / May / Jun Jul / Aug / Sep       % Change
-------------------------------------- --------------- ---------------
Americas                         3.54            3.89             9.9%
-------------------------------------- --------------- ---------------
Europe                           3.16            3.41             8.1%
-------------------------------------- --------------- ---------------
Japan                            3.78            4.05             7.1%
-------------------------------------- --------------- ---------------
Asia Pacific                     9.30           10.02             7.7%
-------------------------------------- --------------- ---------------
Total                           19.78           21.37             8.0%
-------------------------------------- --------------- ---------------


The SIA Global Sales Report

The SIA's Global Sales Report (GSR) is a three-month moving average of sales activity. The GSR is tabulated by the World Semiconductor Trade Statistics (WSTS) organization, which represents approximately 66 companies. The moving average is a mathematical smoothing technique that mitigates variations due to companies' financial calendars.

About the SIA

The SIA is the leading voice for the semiconductor industry and has represented U.S. semiconductor companies since 1977. Collectively, the chip industry employs a domestic workforce of 225,000 people. More information about the SIA can be found at www.sia-online.org.

Contact:

Semiconductor Industry Association
John Greenagel or Anne Craib, 408-436-6600
Email Contact




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