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Demand for GPS devices boosts chip market

Gartner raises global chip forecast for 2008

Gartner has raised its global revenue forecast for the semiconductor industry in 2008, as the memory chip market improves and sales of personal navigation devices increase.

Global chip revenue will increase by 4.6 percent this year to $287bn, up from a previous growth estimate of 3.4 percent, Gartner analyst Richard Gordon wrote in the Semiconductor DQ Monday Report. Revenue last year was $274bn.

Worries that a global economic slowdown might dampen demand for electronics products have been unfounded so far, as production of PCs and mobile phones remain brisk, he said.

"There are no signs of a significant slowdown in the markets for digital consumer electronic products and automotive electronics, both of which would probably be affected by cutbacks in discretionary spending by consumers," Gordon said.

Second-quarter forecasts from electronics and chip companies indicate that they don't expect market conditions to worsen, he added.

One potential problem is an increase in the volume of chips in the supply chain over the past three quarters, a possible sign that demand is faltering. This will be an important statistic to watch over the remainder of the second quarter, Gordon said.

Some analysts and industry watchers have fretted this year over the possible impact of high oil prices and a slowing US economy on the amount people spend on electronics products.

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