Consumer demand fuels chip boom

Global sales of semiconductors jumped nearly 10 percent year-on-year in May, according to the latest figures; the results also showed that consumers are buying electronic devices in greater numbers.

The Semiconductor Industry Association (SIA) announced on Monday that chip sales in May 2006 totalled $19.7bn (£10.7bn), compared to $18.1bn in May 2005. This was also an 0.7 percent increase on the previous month.

Sales of DRAM chips were up 13.7 percent compared to May 2005, which the SIA said was caused by strong sales of personal computers. However, sales of PC microprocessors dropped two percent, which was blamed on computer manufacturers running down their inventory stocks.

With sales of NOR flash memory also buoyant, thanks to the popularity of digital cameras and music players, the SIA believes the chip market can look forward to a bright future.

"We expect to see global semiconductor sales running 9 to 10 percent ahead of last year’s pace for the next several months. End-market demand, inventory levels and capacity utilisation all indicate generally favourable conditions for the industry," said SIA president George Scalise in a statement.