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Gartner: Chip sales to jump 20 percent in 2010

Greater demand for PCs and rising memory prices should push global semiconductor revenue higher this year, reaching $276 billion, says Gartner.

Following a rough 2009, global sales of semiconductors are expected to rise nearly 20 percent this year, according to research released this week by Gartner.

Sales are projected to hit $276 billion this year, an increase of nearly 20 percent, compared with $231 billion last year. The boost in revenue will come courtesy of rising DRAM (dynamic random access memory) prices as well as greater consumer demand for personal computers. Commonly used in PCs, DRAM is likely to be the fastest growing type of chip, with DRAM sales alone shooting up 55 percent this year, according to Gartner.

The semiconductor market dropped almost 10 percent overall last year, but quarter-to-quarter revenue growth staged a robust recovery in the last three quarters, noted Gartner. PC production also increased during the year and is likely to grow around 20 percent this year, boosting chip demand.

Though the year ahead looks good, Gartner believes a minor correction in semiconductor revenue may be warranted to keep chip sales and inventory better aligned with PC sales. The third quarter is typically the year's best quarter for semiconductors as PC and device makers gear up for back-to-school sales and the holiday season. Following an expected 7 percent growth for semiconductors in the third quarter, sales are likely to be relatively flat in the final quarter of the year, which Gartner believes will then sync up chip sales with PC sales.

For the longer term, the semiconductor business should enjoy continued growth at least through 2014, says Gartner, reaching sales of $304 billion by 2012.