Global chipmakers cautious about outlook
BOSTON (Reuters) - Semiconductor makers have turned cautious about year-end sales, amid worries the global financial crisis is hurting consumer confidence and could put a dent in holiday sales.
"At this point we don't have any hard data to go on as to how much consumers are going to open up their wallets," said John Greenagel, a spokesman for the Semiconductor Industry Association, which represents makers of silicon chips that run computers, mobile phones and other electronics devices.
SIA, whose members include Intel Corp, IBM and Advanced Micro Devices Inc, said in a report released on Thursday that it was "cautious about (the) near-term industry outlook."
The SIA's outlook on business at the end of the year, when sales rise going into the busy holiday season, comes as the U.S. House of Representatives prepared to vote on a revised $700 billion bailout of the U.S. financial sector.
The group called on Congress to move swiftly to restore stability to the U.S. financial system.
"With restoring confidence or maintaining consumer confidence, we would enter the strong-selling quarter for our industry in good shape. If that is done, and consumer confidence remains, we are on track for a decent year," Greenagel said.
But even if the bill -- intended to reinvigorate credit markets and interbank lending -- is passed, worries persist over the global economic crisis.
AUGUST SALES RISE
The industry group - whose members also include Texas Instruments Inc, Qualcomm Inc, Rambus Inc and Nvidia Corp - discussed its concerns as it reported that chip sales rose 5.5 percent in August from a year earlier to $22.7 billion.
Year-to-date sales through August rose 4.5 percent to $170.2 billion.
Some 50 percent to 55 percent of the semiconductor industry's revenue comes from sales of chips that end up in mobile phones, personal computers, various consumer electronics products, automobiles and other goods purchased by consumers, Greenagel said.
Continuing price pressure on DRAMs - whose makers include Samsung Electronics Co Ltd, Powerchip Semiconductor Corp and Elpida Memory Inc - and NAND flash memory dampened overall industry growth, the SIA said.
Excluding memory products, industry sales were up 11.4 percent year-on-year in August.
Shares of Intel, the world's biggest chipmaker, fell 5 percent to $17.57 in late afternoon trade, while those of No. 2 microprocessor maker AMD dropped 9.3 percent to $4.30. IBM fell 5.5 percent to $104.04.
(Additional reporting by Shradhha Sharma in Bangalore; Editing by Deepak Kannan and Bernard Orr)
