RealTime IT News

Consumer Devices Power Chip Sales

The computer chip industry continues to break sales records. In October, worldwide sales of semiconductors reached a new high watermark, surpassing $20 billion, according to figures released today by the Semiconductor Industry Association.

Sales are up 6.75 percent from the $18.4 billion that the SIA reported for October 2004, and 2.5 percent from $19.6 billion reported for September of this year.

While all the major segments of the market showed growth, the San Jose, Calif., trade group pointed to consumer electronics as a key driver of the increased sales.

"A sharp rebound in consumer confidence was reflected in strong sales of a broad range of consumer products, such as cell phones, MP3 players, digital cameras, digital TVs, and personal computers," SIA President George Scalise said in a statement. "Industry sales continue to track with our forecast of 6.8 percent growth to $228 billion in 2005. Inventories are in balance, and production capacity utilization remains in the healthy 90 percent range."

Last month, the SIA forecast worldwide sales of microchips will reach $309 billion in 2008 an increase of 45 percent from the $213 billion record level of 2004.

A Merrill Lynch analysis of the SIA figures and its own research forecasts semiconductor growth of 7 percent in 2005 and 10 percent for 2006.

In the memory market, Merrill Lynch notes the average selling price of DRAM has declined four percent from September to October. The research firm expects further price declines though there may be an uptick with new processor introductions in January.

Merrill Lynch predicts any significant increase in the amount of standard memory in desktop and notebook computers isn't likely to happen until the launch of Microsoft's Vista operating system in the second half of 2006.