Microchip Sales to Gain in 2008

Global sales of microchips are expected to increase 7.7 percent in 2008, accelerating from a raised growth forecast of 3.8 percent this year, an industry group said Wednesday.

The Semiconductor Industry Association said demand for consumer electronics continues to drive growth, despite rising energy costs and other concerns.

"This year the worldwide microchip industry will produce 900 million transistors for every man, woman and child on Earth," SIA President George Scalise said in a statement.

"The increasing proliferation of semiconductors into an ever-broader range of consumer products, coupled with the emergence of large new consumer markets in Asia, Eastern Europe and South America, will be the principal drivers of industry growth for the next several years," he said.

The SIA forecast sales of microchips, which include computer processors, memory chips and mobile telephone processors, would rise to $276.9 billion in 2008 from an expected $257.1 billion this year.

While the industry group raised its 2007 growth forecast to 3.8 percent from its June estimate of 1.8 percent, that is still sharply down from its initial expectation of 10 percent growth due to plummeting prices for memory chips.

The price declines have offset increased demand as chips find their way into a broadening array of consumer products such as portable music players, video game consoles and cell phones.

Major chipmakers include industry leader Intel, top cell phone processor maker Texas Instruments, and South Korea's Samsung Electronics, the biggest memory maker.

SIA forecast global chip sales would surpass $321 billion in 2010, with a compound annual growth rate of 7.7 percent for the period 2007-2010.

It said sales of personal computers, the largest single market for microchips, are expected to rise 11 percent to 12 percent this year, cell phone shipments are forecast to grow 12 percent, and digital TV sales are expected to rise 50 percent.

The Philadelphia Stock Exchange's semiconductor index hit a year low this week, down 22 percent from a year high reached in July. The index edged 0.08 percent lower in early trading on Wednesday.

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