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Chips Take July For $20B

Semiconductor sales rallied to $20.1 billion in July, an 11.5 percent from July 2005, said the Semiconductor Industry Association (SIA) in its latest report.

The July sales were a small increase of 1.8 percent from the $19.8 billion in sales reported in June 2006.

SIA President George Scalise said consumer purchasing patterns account for the semiconductor market's year-over-year surge.

"July sales reflect the historical pattern for the industry, with growth in unit demand coupled with declining average selling prices," Scalise said. "This trend helps make possible the very attractive prices for many consumer products."

For example, the average selling price for a PC declined by approximately 7 percent year over year, while computer products represent over 40 percent of demand for semiconductors.

The worldwide semiconductor market is on track to surpass $240 billion in sales this year, which represents a new record, according to Scalise.

"Growth continues to be strong across a broad range of end markets and geographic regions, as well, particularly Asia-Pacific, which is up over 13 percent year on year, and the U.S. where sales increased almost 18 percent over last year," Scalise said in a statement.

While consumers are credited with carrying the market, advancements in dual-core technologies from Intel and AMD should have an impact in the coming months.

SIA's report comes on the heels of recent dual-core server chip announcements from both Intel and AMD.

AMD unleashed its latest Rev F Opteron dual-core processor for servers and workstations; Intel later launched servers with its Tulsa Xeon 7100 series processors.

While it is too soon to know what effect these new dual-core offerings will have on market revenues, they symbolize the innovation that is prompting corporations to buy newer, multi-core servers.

Meanwhile, Scalise also noted that capital spending in 2006 is expected to amount to approximately 22 percent of semiconductor sales, which is in line with anticipated technology requirements and anticipated sales growth.