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Global Chip Sales $248B in 2006

Global semiconductor sales reached a record $248 billion last year, driven largely by favorable economic conditions and rising demand for consumer electronics such as high-definition TVs, digital music players and cell phones, an industry group said Friday.

Worldwide chip sales increased 8.9 percent from the $227.5 billion recorded in 2005, as advances in semiconductor technology have enabled companies to lower their costs to produce chips while also boosting performance, the Semiconductor Industry Association said.

"2006 was the 'Year of the Consumer' in the electronics industry," said George Scalise, president of the SIA.

Sales in December, while slightly lower than the previous month, nonetheless gained year-over-year to come in at $21.7 billion, a rise of 9 percent from the same month last year.

For the fourth quarter, worldwide semiconductor sales clocked in at $65.2 billion, also a 9 percent increase over last year.

Scalise said that sales of high-definition television sets in the United States more than doubled last year and are expected to continue growing, helped by sharply falling prices and an increasing amount of high-definition programming.

Scalise said demand for low-end cell phones in emerging markets pushed the average semiconductor content of those phones -- measured by cost -- down slightly to about $40 last year, but added that cell phone subscriptions in emerging markets continues to remain strong.

According to the SIA, more than 34 million digital music players were sold in the United States in 2006. Although the growth rate for those devices is expected to slow, their semiconductor content is expected to grow as companies add functions such as video playback and increased storage capacity.

The group said about 235 million personal computers were sold around the world in 2006, reflecting a somewhat slowing growth rate. However, PCs continue to consume a significant share of the total semiconductors produced.

The group said it expects worldwide semiconductor sales to grow 10 percent more in 2007 to $274 billion.

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