Gartner raises global chip forecast on strong PC, mobile phone sales

The new forecast marks the second time Gartner has increased its global chip outlook in less than three months due to stronger than expected sales

Gartner raised its revenue forecast for the global chip industry on Monday due to stronger than expected demand for PCs and mobile phones, as well as government stimulus programs that have boosted demand for chips.

The market researcher predicts global chip revenue will reach $226 billion this year, down 11.4 percent from $255 billion last year. The revised figure is an improvement over Gartner's previous forecast calling for a drop of 17.1 percent to $212 billion.

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Gartner also raised its projection for 2010, saying chip revenue will rise 13 percent to $255 billion, matching the all-time-high from 2008. The researcher had previously forecast 10.3 percent growth next year to $233 billion.

The new forecast marks the second time Gartner has increased its global chip outlook in less than three months.

"The semiconductor market's recovery is well under way, and the outlook continues to improve as semiconductor suppliers post outstanding quarterly results," Gartner analyst Bryan Lewis wrote in a report on Monday. "PCs are the single largest application driving the semiconductor rebound: PC unit growth projections dramatically improved from double-digit declines at the start of 2009 to the current low-single-digit positive outlook," he added.

The strong recovery in PC demand has made microprocessors and DRAM two of the strongest performers in chips 2009, Gartner said. DRAM in particular began to be profitable in the third quarter for some companies after almost three years of losses.

Despite the positive news, Lewis warned that recent industry checks indicate PC orders may be slowing earlier than expected and that 2010 may get off to a slow start.