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Semiconductor surge

Jeff Tyler Jun 8, 2006
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Semiconductor surge

Jeff Tyler Jun 8, 2006
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TEXT OF STORY

SCOTT JAGOW: The people who produce microchips can’t make ’em fast enough to keep up with demand. A trade group predicts another boom in sales this year. But as Jeff Tyler reports, profits are another story.


JEFF TYLER: These days, semiconductors run more than just your personal computer. The microchips are now used in cell phones, digital music players and even cars.

ROB ENDERLE: I don’t think people realize how many microprocessors that a car consumes. And the fact that’s going up dramatically as well. There are actually hundreds of microprocessors consumed by each individual automobile.

That’s tech industry analyst Rob Enderle. Even though demand is up, he says the makers of microprocessors have been forced to cut prices.

ENDERLE: Because there’s so much competition here, prices continue to be reduced over time at a fairly aggressive pace.

Good thing the Semiconductor Industry Association forecasts 10 percent growth for microchips this year. Enderle says companies will need to sell more products to compensate for shrinking profit margins.

I’m Jeff Tyler for Marketplace.

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