PC shipment growth to drive chip recovery

An increase of almost 11 per cent in shipments of PCs this year will help drive a semiconductor market recovery in the second half, say analysts.

"The launch of Windows Vista has not boosted PC shipments as much as some bullish forecasts projected, but we expect it to increase demand to some degree, " wrote analysts from Japan's Nomura Securities in a report this week.

"We retain our view [that] the market for semiconductors used in mobile phones and digital consumer electronics will grow as the number of devices per product increases."

Prices of DRam chips, one of the weakest areas of the semiconductor market, continue to fall, and the decline was even worse than expected during April and May, according to Nomura.

The company now expects DRam prices to fall almost 40 per cent during the year, despite a recovery in the second half. Flash memory prices are predicted to fall 54 percent, an improvement on earlier forecasts.

While many consumer electronic products use DRam, large quantities of the chips are used in PCs and video game consoles.

Flash memory is a key component of digital audio players and personal media players, such as Apple's iPod range. It is also used in data storage cards for digital cameras and other products.

Figures and predictions in this article refer to Nand Flash, the cheapest and most commonly used form of Flash memory.