The Semiconductor Industry Association (SIA) yesterday cut its forecast for growth in global sales of semiconductors in 2008, blaming price pressure in the memory sector.

It said chip sales were now expected to grow 4.3 per cent, to $266.6bn, significantly down from the trade group’s November forecast of 7.7 per cent.

The SIA, in a mid-year update to its annual forecast, said that stiff competition in memory chips – particularly in the DRAM sector – will hamper growth in 2008.

Chip sales will grow to $324.1bn in 2011 according to the group, and it projected a compound annual growth rate of 6.1 per cent for the period 2008-2011.

The SIA said that growth was set to slow in the sector for 2008 despite strong customer demand for mobile phones and computers.

“DRAM revenues declined by 34 per cent even as unit shipments increased by more than 30 per cent in the first four months of 2008 compared to the same period last year,” said SIA president George M. Scalise in a statement.

“Total unit sales of PCs are on pace to grow by 10 per cent this year to around 300 million units. Cell phone unit shipments are expected to grow by about 12 per cent to more than 1.3 billion units, with the largest growth coming from China, India, and other emerging markets," he added.

Late last year Gartner analysts downgraded worldwide semiconductor spending and sales expectations by some 10 per cent amid oversupply woes, high energy costs, and credit crunch fears. ®