Semiconductor Sales Forecast To Top $257 Billion This Year - InformationWeek

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Semiconductor Sales Forecast To Top $257 Billion This Year

The strong demand is being fueled by growing sales of consumer electronics, coupled with the emergence of large markets outside the U.S., according to a trade group.

Semiconductor sales are expected to grow steadily through 2010, driven in part by consumers' appetite for computers, MP3 players, mobile phones and other electronic gadgets, a trade group said Wednesday.

Worldwide sales of microchips are expected to increase by 3.8% this year to $257.1 billion from $247.7 billion in 2006, a record year for the industry, according to the Semiconductor Industry Association. Growth is expected to continue at a healthy compound annual growth rate of 7.7% through 2010, when sales are expected to top $321 billion.

The strong demand for microchips is being fueled by growing sales of consumer electronics, coupled with the emergence of large markets in Asia, Eastern Europe, and South America, SIA President George Scalise said in a statement.

The Asia Pacific region is expected to continue to be the fastest-growing regional market, accounting for 51.1% of microchips sold in 2010 from 48.4% this year.

A key driver behind this year's microchip market was robust sales of personal computers, cellular phones, MP3 players and digital televisions, Scalise said. "Consumer purchases continued to drive industry growth in 2007 despite rising energy costs and other concerns."

Sales of PCs, the largest single market for microchips, are expected to grow by 11% to 12% this year, and handset shipments are forecast to increase by 12%, according to the SIA. MP3 and portable media player shipments are forecast to grow by 20%, and digital TV sales by 50%.

Consumers have benefited greatly from improvements in semiconductor performance, Scalise said. The typical PC, for example, is 100 times more powerful than PCs in 1995, but sell for less than 30% of the price. "We can expect to see similar cost and performance improvements in other silicon-intensive consumer products in the years ahead," he said.

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