Gartner (Stamford, Conn.) said it now expects global chip revenue to be $226 billion this year, down 11.4 percent from 2008. The new projection is a revision from the company's third quarter forecast, which called for revenue to decline 17 percent this year. The market watcher had predicted in February that chip revenue would be down 24.1 percent in the year, a figure that it revised in May to 22.4 percent.

Gartner also upped its forecast for 2010 chip sales, saying it now expects them to grow 13 percent to reach $255 billion, roughly the same level as 2008. In the third quarter, Gartner projected that chip revenue would be up 10.3 in 2010.

The most significant changes reflected in Gartner's most recent forecast upgrade came from ASSPs, memory and microprocessors, all of which are benefiting from a strengthening PC market, Gartner said. ASSPs and memory—primarily NAND flash—also benefited from an improved outlook for cell phones, Garnter said.

Gartner is not alone among market research firms that have revised their chip revenue forecasts multiple times during 2009 as market conditions have improved. The year originally appeared as though it would be historically bad for IC sales. But chip sales have rebounded faster than expected, setting the stage for a decline that is expected to be much more moderate than originally feared.

The Semiconductor Industry Association earlier this month revised its forecast for chip sales, saying it now expects sales to be down 11.6 percent this year. The trade group had in June projected a 21.3 percent decline for the year.

Bryan Lewis, vice president and chief analyst for semiconductors at Gartner, told EE Times recently that the chip market outlook is improving every month. A quote from Lewis that appears in Gartner's most recent semiconductor industry newsletter credits inventory replenishment, government stimulus packages (especially in China) and outstanding price elasticity on consumer products for helping to drive the recovery.

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