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Statistics from the Semiconductor Industry Association showed that sales in July 2001 were just USD10.86 billion, compared to USD17.29 billion in July 2000.
The July sales also dropped 6 percent compared to sales in June 2001. George Scalise, president of the SIA, said the falling figures were due to slow economic activities in all of the major economies, and to excess inventory in the IT market.
But Scalise said that inventories were being reduced, and that the association expects demand to pick up again in the coming quarters.
"We expect sales of personal computers, communications products and a variety of handheld devices, including newly introduced digital audio products, will accelerate demand for a broad range of semiconductors," he said. The boost in demand should lead to growth for industry in the December quarter.
The Americas were worst hit by the fall in chip sales, dropping more than 50 percent over the last year. Sales in the European market fell by 34 percent, and were down around 30 percent in the Asia Pacific region.
In Ireland companies hit by the depressed chip market include Parthus, the semiconductor IP firm, which was downgraded by investment bank UBS Warburg on Monday. UBS cut its price target for Parthus from STG0.45 to STG0.25, its second downgrade on Parthus since July. Parthus fell more than 6 percent in London and New York following the downgrade, closing at STG0.34 and USD4.76 respectively.
The SIA noted in its September report that fluctuations in the semiconductor industry typically operate on a four-year cycle, and that its compound annual growth rate has hovered around 17 percent over the past four decades.
The association's report is published every three months and is tabulated by the World Semiconductor Trade Statistics organisation, which represents approximately 66 companies.
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