SIA: World Chip Sales Rose 6.8% in 2005

Global sales of microchips rose 6.8 percent to a record $228 billion in 2005, driven by demand for computers, mobile phones, digital music players and other consumer devices, the Semiconductor Industry Association said Thursday.

Sales in December were just under $20 billion, a slip of 2.2. percent from November in line with seasonal patterns, but up 8.6 percent from a year earlier, the SIA said.

"Despite record energy prices and an unprecedented series of natural disasters, worldwide demand for semiconductors increased in all end markets," SIA President George Scalise said in a statement.

The figures include sales of all kinds of chips, known as semiconductors, such as PC microprocessors made by Intel Corp. (INTC), memory chips from South Korea's Samsung Electronics Co. Ltd. , and cellphone processors from Texas Instruments Inc (TXN).

Chip stocks have generally outperformed the broader market. Over the past year, the Philadelphia Stock Exchange semiconductor index has risen 34 percent, compared to 6.5 percent for the S&P 500.

December sales growth was strongest in Asia, hitting 20 percent from a year earlier, with China's emergence as a top manufacturer of electronics making the country the brightest growth spot.

Semiconductor sales in the Asia-Pacific region were $9.3 billion, the SIA said.

The SIA said earlier it expects microchip sales in 2006 to rise 7.9 percent from 2005, to $245 billion.

Scalise said that for the first quarter of 2006, sales could either rise or fall 1 percent from the fourth quarter.

"The overall economic climate continues to be healthy, excess inventories are not an issue, and production capacity is in line with expected demand," Scalise said.