Recovery and Restructuring
By George Burns, Strategic Marketing Associates
Recent sales reported by both the SIA and SEMI show some signs of improvement after months of bad news. After falling for four months, from November 2007 through February 2008, the three-month moving average of semiconductor sales as published by the SIA climbed to $21 billion in March 2008 (see Figure 1).
After falling for five straight months (from September 2007 through January 2008), the SEMI three-month moving average of equipment sales grew by almost 1 percent in February 2008 and then, in March, posted the largest monthly gain since July of 2006. March equipment sales grew by 7 percent to $3.5 billion.
While these data points are insufficient to constitute a trend, a comparison of the recent sales figures with longer term averages does show the beginnings of positive momentum (see Figure 2). Thus, March's reported 3.5 percent change in chip sales is the first time in six months that the change in chip sales is not below average. While equipment sales growth is still below average, the gap between the two is narrowing. In March, actual sales growth was just one-and-one-half percent under the long term average, the closest it has been since last August.
Memory pricing has stabilized recently and is beginning to grow. If this continues, we can look forward to continuing improvement in chip sales and, consequently, in equipment sales. Recent trends in memory fab construction activity augur well for this improvement in memory pricing.
George Burns of Strategic Marketing Associates wrote this article, originally published in International Wafer Fab News (May 31, 2008). The article is used with permission.