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Chip Demand Spurs Sales Record

Semiconductor sales set record at $20.5 billion in August, industry group says.

Semiconductor sales worldwide surged to a monthly record of $20.5 billion in August, fueled by higher demand for memory chips used in PCs and mobile gadgets such as cell phones and digital cameras, an industry group reported Monday.

The figure was more than 10 percent higher than the $18.6 billion reported in August 2005, and a slight increase from the $20.1 billion reported in July, the Semiconductor Industry Association said.

The previous one-month record for worldwide chip sales was $20.4 billion in November 2005.

Much of the growth in August was driven by higher sales of dynamic random access memory chips, which are widely used to store information in computers and other electronics. Sales of DRAM chips increased by 31.4 percent from a year ago, and 7.5 percent from July.

Manufacturers of mobile consumer products also were ramping up production for the holiday season, driving up sales for NAND flash memory chips commonly found in digital music players and cameras.

A decline in gasoline prices also appears to have boosted consumer confidence, a boon for an industry that sees about half its sales from consumer products.

"Once again we saw relatively strong sales across a very broad range of semiconductor products, which reflects healthy end markets," SIA President George Scalise said in a statement. "Inventories have risen both at semiconductor manufacturers and in the channel in recent months, but remain in line with requirements for the holiday build season."

Revenue from microprocessors -- the chips that serve as the brains of computers -- declined by 6.8 percent from a year ago as the average price has fallen 18 percent.

The San Jose-based SIA has represented U.S. chip manufacturers since 1977.

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