Chip Sales Up Almost 10%

May was a good month for semiconductor chip sales.

The Semiconductor Industry Association (SIA) reported chip sales of $19.7 billion for May, a 9.4 percent hike from the $18.1 billion tallied for the same month a year ago.

The increase from April of this year, when sales were $19.6 billion, was only 0.7 percent.

But the SIA sees strong chip growth ahead.

The San Jose, Calif.-based trade organization said it expects global chip sales to continue to run nine to 10 percent ahead of last year’s pace for the next several months.

“As consumer products drive an increasing proportion of microchip sales, the growth of the semiconductor industry more closely reflects overall economic growth,” said SIA President George Scalise in a statement.

“Sales of cell phones and other consumer electronics products once again were the principal contributors to growth in semiconductor sales.”

Sales of analog  and DSP  chips, both important components of cell phones, grew by 21.5 and 13.7 percent, respectively.

“Strong growth in sales of NOR flash memory  products and optoelectronic  devices are indicators of continued growth in sales of digital cameras and cell phones,” said Scalise.

Personal computers and flash memory products have also buttressed the growth in chip sales.

The SIA noted that even though PC microprocessor sales declined by two percent from May 2005, unit sales of PCs ran ahead of expectations, supporting a 13.7 percent year-to-year growth in DRAM  memory chips.

The SIA also said the strong rise in notebook PC sales has been helped by falling prices. This year, for the first time ever, the average selling price for a notebook fell below $1,000.