Air cargo industry gets lift on global chip sales forecast

Patrick Burnson, Executive Editor -- Logistics Management, 11/19/2007

SAN JOSE, Calif.—Air cargo shippers and carriers received some heartening news last week as the Semiconductor Industry Association (SIA) announced continued robust sales.

“Given the JIT (just-in-time) imperatives of this business, our current forecast means good news for all outbound transport providers,” said SIA spokesman, John Greenagel.

SIA’s annual global forecast projects that worldwide sales will surpass $321 billion in 2010, with a compound annual growth rate of 7.7 percent for the forecast period of 2007-2010. The new forecast projects global sales of $257.1 billion in 2007, an increase of 3.8 percent over 2006 sales of $247.7 billion. Going forward, the SIA forecasts sales of $276.9 billion in 2008, representing a sequential increase of 7.7 percent; $296.2 billion in 2009, representing a sequential increase of 7.0 percent; and $321.5 billion in 2009, representing a sequential increase of 8.5 percent.

“Following aircraft and aircraft parts, chips represent the most highly valued U.S. air cargo export,” said Greenagel.

The SIA noted that consumer demand for electronic products continues to fuel strong demand for microchips. “This year the worldwide microchip industry will produce 900 million transistors for every man, woman, and child on earth,” said SIA President George Scalise in a statement. “The increasing proliferation of semiconductors into an ever-broader range of consumer products, coupled with the emergence of large new consumer markets in Asia, Eastern Europe, and South America will be the principal drivers of industry growth for the next several years,” said Scalise.

“Consumer purchases continued to drive industry growth in 2007 despite rising energy costs and other concerns,” Scalise continued. “Unit sales of personal computers, cell phone handsets, MP3 players, and digital televisions were very robust in 2007.” The SIA noted that sales of personal computers, the largest single market for microchips, are now expected to grow by 11 to 12 percent in 2007. Handset unit shipments are forecasted to grow by 12 percent. MP3 and PMP unit sales are forecasted to grow by 20 percent, and digital TV units by 50 percent.

“All of these products – personal computers, cell phones, MP3 players, and digital TV sets – have high silicon content,” said Scalise. “Progress in semiconductor technology has been a huge boon to consumers. Today a typical PC sells for less than 30 percent of the price of a comparable unit in 1995, but today’s model is 100 times more powerful. We can expect to see similar cost and performance improvements in other silicon-intensive consumer products in the years ahead.

“The semiconductor industry continues to be the single most important enabling technology driving world economic growth. Continuous advances in microchip technology have made ‘faster, better, cheaper’ the mantra of our industry. This fundamental value proposition will continue to drive industry sales growth in the years ahead,” Scalise added.

The forecast projects growth in all regional markets through 2010. The Asia-Pacific region will continue to be the fastest-growing regional market, growing from 48.4 percent in 2007 to 51.1 percent in 2010.