Gartner raises chip market forecast, says report

Gartner Inc. has raised its forecast for annual growth in the semiconductor market in 2006 to 10.6 percent from 9.5 percent, based on increased demand for PCs, according to a Reuters report that quoted a Gartner analyst as its source.

The firm now expects the market for semiconductor chips to reach $259.5 billion in 2006, up from $234.6 billion in 2005, the report said. As part of that growth memory chips are expected to grow 15.5 percent to $57.4 billion, the report quoted the research firm saying.

"I was pessimistic about the outlook of the DRAM market a couple of months ago because of the oversupply problem, but in the past month PC shipments grew and that boosted demand for chips," the report quoted Andrew Norwood, a Gartner VP, as saying.

According to the report, Norwood said he was not worried about a build up of inventories, which are at a relatively high level in the first months of 2006. The report added that Gartner views that chips used in PCs and cellphones will show a composite average growth rates (CAGRs) of 9.8 percent 9.8 percent and 13.3 percent, respectively, between 2005 and 2010, yielding a CAGR of 8.5 percent in global chip sales over the same period.

- Peter Clarke
EE Times