Chip sales set to expand next year

Worldwide semiconductor sales will grow in 2010 as chip sales gain steam in response to stabilising economies, says analyst firm iSuppli.

Semiconductor sales could grow by 13.8 percent on a year-over-year basis to reach £154bn in 2010. Chip revenue will keep growing through 2012 and could reach levels of 2007, after which chip revenue skid began. Chip sales could total £176bn in 2012; sales tallied close to £171bn in 2007.

However, global chip sales will decline in 2009, albeit at a lower rate than iSuppli first projected. The analyst firm predicted year-over-year global chip sales would decline by 16.5 percent in 2009. Earlier in the year, iSuppli projected a 23 percent drop. Chip sales in 2009 will total £135bn, compared to £161bn in 2008.

Chip sales have "gained clarity" as economies stabilise and supplies improve in key markets after an unstable first quarter, iSuppli said in a statement. Semiconductor sales and inventory levels in the PC and mobile-handset markets, which account for a majority of semiconductor sales, improved in the second quarter, iSuppli said. Major vendors have also increased their outlooks for PC and mobile-handset sales, which has given more clarity to project overall chip sales for the year.

"Semiconductor shipments rebounded as inventories were replenished and modest forward-looking purchases were made," said Dale Ford, senior vice president, market intelligence services for iSuppli, in a statement.

Intel CEO Paul Otellini last week said that its chip shipments were stabilising as PC shipments start to take off. Otellini's comments were stronger than conservative outlooks provided for an expected PC industry recovery from companies like Advanced Micro Devices and Dell earlier in the year. The companies said that PC shipments would grow as users look to buy new PCs with Microsoft's upcoming Windows 7 OS, which is due next month, and as companies look to refresh PCs.