LONDON — The Semiconductor Industry Association (SIA) has revised upwards projected worldwide sales of chips for 2006, and now suggests growth of 9.8 percent to $249 billion, up from its previous estimate of 7.9 percent growth to $245 billion.

The SIA said the correction is mainly due to better than anticipated demand for chips by the mobile phone sector.

The revised forecast also includes more optimistic projections for industry sales from 2006 through 2009. The Association says the semiconductor industry will grow by 11.0 percent in 2007, 12.0 percent in 2008, and 4.0 percent in 2009.

If these projections prove correct, worldwide semiconductor sales will reach $323 billion in 2009. Actual sales for 2005 amounted to $227.5 billion. The new forecast projects an average compound annual growth rate of 9.2 percent from 2005 through 2009.

“Stronger than anticipated end-market demand, mainly in consumer product sectors, caused us to raise our forecast for semiconductor industry growth for 2006. The fastest-growing major end-market segment is cellular telephones – especially third-generation (3G) phones.

"We now believe approximately one billion cell phones will be sold worldwide in 2006. With an average semiconductor content of $41 per unit, this segment is now second only to personal computers in terms of total chip consumption,” said SIA President George Scalise.

He said other major drivers of demand include personal computers, digital cameras, digital television, and MP3 players. “Each of these end-markets will grow in double digits this year, and we expect continued growth through the current forecast period,” said Scalise in a statement Wednesday (June 7).

“It is very remarkable for an industry of this size to sustain growth in the range of 8 to 10 percent annually. With both inventory and capacity in balance, conditions are favorable for continued semiconductor industry growth,” Scalise concluded.

The revised forecast suggests analog products will be one of the fastest-growing segments this year, with growth driven by strong demand from wireless communications and industrial and medical equipment applications. The revised forecast projects growth of 17.3 percent to $37.4 billion. This segment is projected to grow to $48.6 billion by 2009, a CAGR of 11.1 percent.

However, the fastest growing segment this year is expected to be flash memory, with sales growing at 20.0 percent to $22.3 billion in 2006 and to $31.1 billion in 2009, a CAGR of 13.7 percent.

DRAM sales, however, are projected to increase more modestly, at 9.1 percent to $27.9 billion in 2006 and to $32.8 billion in 2009, a CAGR of 6.4 percent.

Optoelectronic device sales are also projected to do well, growing by 11 percent to $16.5 billion in 2006 and to $21.9 billion in 2009, a CAGR of 10.1 percent.

Discretes are projected to grow by 4.9 percent to $16.0 billion in 2006 and to $18.9 in 2009, a compound annual growth rate (CAGR) of 5.5 percent. The sector includes power transistors and radio frequency (RF) transistors that are found in wireless consumer products.

Microprocessor sales are projected to grow by 4.3 percent to $36.4 billion in 2006 and to $46.0 billion in 2009, a CAGR of 7.1 percent. And the market for microcontrollers is forecast to increase by only 1.9 percent to $12.3 billion in 2006 and to $15.4 billion in 2009, a CAGR of 6.3 percent.

Digital signal processors (DSPs) sales will fare better, according to the SIA, growing by 18.5 percent to $9.0 billion in 2006 and to $14.1 billion in 2009, a CAGR of 16.7 percent.

MOS logic device sales are projected to grow by 7.6 percent to $62.1 billion in 2006 and to $82.5 billion in 2009, a CAGR of 9.3 percent.