The Semiconductor Industry Association (SIA) yesterday warned that the global chip industry will perform less well in 2006 and 2007 than the organisation had previously forecast. However, it said 2005 will prove slightly more successful than anticipated.

The SIA now believes $227.6bn worth of semiconductors will have been sold in 2005, 6.8 per cent higher than 2004's total and $1.6bn more than the organisation forecast in June.

Then, it said 2006's sales would total $246bn, rising to $273bn in 2007 then $309bn in 2008. Yesterday, it cut the first of those two forecasts slightly, to $245.5bn and $271.3bn, respectively. Its new 2008 forecast is a little higher than the previous one: $309.2bn.

The SIA pointed to personal computers, mobile phones, digital cameras, digital TVs and MP3 players as the key end-user markets that will deliver the growth that will drive the chip market in 2006. The last two categories in particular - they are both expected to grow 52 per cent next year. For example, MP3 player sales are expected to drive sales of NAND Flash up 23.5 per cent in 2006.

DRAM sales, by contrast, will fall 10.1 per cent thanks to a cyclical dip in the market. ®