SIA: June Chip Sales Up 9 Percent

Industry trade group Semiconductor Industry Association said Thursday worldwide sales of semiconductors for the month of June increased 9 percent from the same month last year, while second-quarter sales dropped by 0.3 percent sequentially due to declining prices, but were up 9.4 percent year over year.

Semiconductor sales totaled $19.64 billion in June, according to the SIA, up from $17.96 billion last year, bringing total second-quarter sales of $58.9 billion.

"The semiconductor sales numbers reported today reflect the mixed earnings results we have seen in the industry over the past few weeks," said SIA president George Scalise, in a prepared statement. "Unit demand has remained strong this quarter, up about 5 percent across the industry. Strong competitive pressures that have reduced prices in some major product sectors are impacting revenues."

SIA noted that due to competitive pricing, during the second quarter the average price of a laptop fell more than 18 percent from last year.

ThinkEquity analyst Eric Ross said that the numbers could indicate the year will be softer than others expect.

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"We continue to believe that 2006 will be a slower year than most are modeling," Ross wrote in a note to clients. "While many are modeling 10 percent to 15 percent (sales increase) versus 2005 (down from 15 percent), we expect growth of close to 8 percent to 10 percent."

Shares of chip maker Intel Corp traded at $17.50 in the premarket session, up a penny from Wednesday's closing price of $17.59 on the Nasdaq, while shares of rival Advanced Micro Devices Inc. were up 15 cents from Wednesday's closing price of $19.60 at $19.75.

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