Netbooks propel global semiconductor sales

By , IDG News Service |  Hardware

Chip sales are growing by the month, partly driven by growing netbook sales and falling laptop prices, market research firms said on Friday.

Global semiconductor sales grew by 5 percent from July to August as consumers picked up more laptops, especially netbooks, said the Semiconductor Industry Association in a study. Consumers are drawn to the lower prices of netbooks, which account for close to 17 percent of total laptop unit shipments worldwide, SIA said.

"Growing sales of netbook personal computers ... have created an important new market segment, filling a gap between 'smart cell phones' and conventional laptop PCs," said George Scalise, president of SIA. Netbooks have small screens and keyboards and are designed to run basic Internet and productivity applications.

Laptop prices have fallen by close to 14 percent compared to last year and the memory used in these devices has increased 25 percent, SIA said. That has contributed to growing chip sales, which totaled $19.1 billion in August.

Semiconductor sales also rose in July compared to June, iSuppli said on Friday. The August sales growth points to a slow recovery from the steepest downturn the industry has faced in close to a decade, the research firm said. Semiconductor sales grew across all major regions, with the Americas recording 5.4 percent growth and sales in Asia-Pacific growing by 5.3 percent.

Consumer electronics -- including mobile phones and laptops -- accounted for a bulk of the semiconductor sales. Semiconductors like processors, and storage devices like flash memory go into devices such as PCs and cell phones. Semiconductor sales to the consumer electronics sector increased by about 28 percent in the third quarter compared to the second quarter, iSuppli said in a statement.

"This reveals a pattern of solid sequential growth for the first two months of the third quarter," iSuppli said. However, chip sales fell by 16 percent compared to August 2008, SIA said. ISuppli predicted a third-quarter revenue decline of 16 percent on a year-over-year basis. ISuppli earlier this week projected that semiconductor revenue could grow by as much as 13.8 percent in 2010.

Intel CEO Paul Otellini last week said that its chip shipments were stabilizing as PC unit shipments showed signs of recovery. Companies like Advanced Micro Devices and Dell have also said PC shipments could recover as users upgrade PCs with Microsoft's upcoming Windows 7 OS, which is due this month.

IDC in July reporting stronger-than-expected PC shipments for the second quarter of this year, boosted by a strong interest in laptops and lower prices. PC shipments fell by 3.1 percent, less than IDC's original projection of 6.3 percent for the second quarter.

However, IDC warned that laptop shipments were affected by weak enterprise spending, which may pick up next year as companies look to upgrade to newer hardware and software.

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