Market researcher iSuppli trimmed the its forecast for 2005 semiconductor sales amid rapid rise in global energy prices combined with a growing excess of chip production capacity.

However, the silver lining is that slower growth this year will likely translate into better growth next year, the company said.

Global chip sales will likely only rise 2.4 percent this year to $232.7 billion, iSuppli said, slower than the 5.9 percent growth it previously forecast.

"A weaker than expected first half, coupled with the likely impact of high oil prices in the second half, have been instrumental in bringing down iSuppli's 2005 semiconductor forecast," said Gary Grandbois, iSuppli's principal semiconductor analyst, in a statement.

Worldwide capacity increases despite slowing growth and weakening prices also contributing to the slower sales, iSuppli said.

Slower chip sales this year, however, will likely mean stronger growth in 2006 and beyond, according to the company. Chip sales growth will accelerate in 2006 to $242.8 billion in sales, up 4.3 percent from this year and an increased pace compared to iSuppli's previous forecast of 3.9 percent growth.

By: DocMemory
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