Consumer products to drive chip sales

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Global sales of microchips will reach $309bn in 2008, up 45 per cent on the $213bn recorded in 2004, according to the annual forecast of the Semiconductor Industry Association trade body.

The SIA predicted a compound annual growth rate of nearly 10 per cent for 2005 to 2008. It sees sales increasing nearly 7 per cent to $227bn this year, having earlier predicted flat growth when an inventory build-up signalled a possible slump. Sales growth should rise steadily – by 8 per cent in 2006 to $245bn, by 10.5 per cent to $271bn in 2007, and by 14 per cent in 2008, it said.

“Consumer products will be the major growth-drivers in the years ahead,” said George Scalise, SIA president. He cited cell phones, portable media players and digital TVs as the major products boosting the chip sector.

“Consumers are now driving most of the advances in personal computers, which have become the hub of home technology,” he added.

“Fast-growing consumer markets are expanding demand for leading-edge products for digital signal processing, flash memory, and power management.”

The SIA anticipates digital TVs and MP3 players both enjoying 52 per cent growth rates next year, compared with 9 per cent for digital cameras, 10 per cent for PCs and 13 per cent for cell phones.

Digital Signal Processors, the major products of Texas Instruments, should enjoy the strongest growth among semiconductors at 17.2 per cent as more are used in phones and a broader range of consumer devices.

D-Ram memory-chip sales are expected to fall 10 per cent due to a “mild cyclical decline”.

In a separate report, the Gartner research firm yesterday forecast modest growth during the next few years with a mild slowdown in 2007 when growth would be only 5.1 per cent, less than half the figure predicted by the SIA.

Gartner said there was something of a void in semiconductor demand to be filled as the PC and cell phone markets entered maturity and lost their ability to fuel strong growth.

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