Microprocessor Vendors See Weak Revenue in April

Intense competition between microprocessor vendors led to a 6.1 percent decline in sales revenue between March and April, despite decent growth in the rest of the semiconductor market.

The slump dragged the worldwide semiconductor market down from March revenues of US$19.7 billion to April revenue of $19.6 billion, according to a study the Semiconductor Industry Association (SIA) released Thursday.

The revenue drop could have come because Intel and Advanced Micro Devices have been cutting prices on current chips as they roll out products.

Still, the study offered hope for future growth. The market-wide April revenue figure marks an 8.1 percent increase over the same month last year. And monthly PC sales climbed 13 percent to 15 percent compared to April 2005.

That jibes with a 10.2 percent increase in PC shipments by market-leader Dell, comparing the first quarter of 2005 with the first quarter of 2006. Second-place vendor Hewlett-Packard grew at 22.3 percent over the same period, according to Gartner.

The overall market for semiconductors slumped because microprocessors are its largest single sector, at 14 percent, according to SIA President George Scalise.

Working against that trend, strong sales of consumer electronics drove the rest of the market to strong year-over-year increases.

Demand for wireless handsets sustained the market for analog electronics, digital signal processors, NOR flash and optoelectronic devices.

Meanwhile, the popularity of digital music players drove NAND flash to a 25 percent increase, comparing April 2005 to April 2006. Digital music player sales grew at 50 percent year over year.

-Ben Ames, IDG News Service

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