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Personal Computer IC Sales To Rise 6% in 2006

Average memory content increases 28%, spurs market growth

Despite intense pricing competition in PC processors and a buildup of some semiconductor inventories, personal computer IC sales are expected to grow 6% to a record-high $73.6 billion in 2006 from $69.5 billion in 2005, according to IC Insights’ new 2007 IC Market Drivers report. Prior to 2005, the peak level for PC integrated circuit sales was $64.2 billion set in 2000.

On average, PCs sold in 2006 contain $319 of integrated circuits, a 4% decrease from the average value in 2005, based on IC Insights’ market analysis. The personal computer IC market will account for an estimated 35% of all integrated circuits sold in 2006, down slightly from 36% in the past two years and 37% in 2003.

During 2006, PC consumption of integrated circuits has been propped up by a 28% increase in the amount of main memory, which reached an average of 800Mbytes (megabytes) compared to 625Mbytes in 2005. Average PC main memory is forecast to rise 35% in 2007 to 1,080Mbytes.

Overall, personal computer sales growth has slowed in 2006 after the market completed a three-year PC-replacement cycle, which provided a lift in unit volume shipments between 2003 and 2005. IC Insights estimates that PC unit sales (desktop computers and portable systems) will increase 10% to 231 million in 2006 compared to 210 million in 2005, when personal computer purchases grew nearly 16% after rising 15% in 2004. IC Insights estimates that PC market revenues will increase by only 1% in 2006 to $229 billion because of an 8% decline in the average selling price.

The scheduled full release of Microsoft’s delayed Windows Vista operating system in 1Q07 will help boost PC unit sales in 2007. IC Insights is forecasting a 12% increase in PC unit shipments and 4% growth in system revenues. However, IC Insights does not believe a new PC-replacement cycle will fully take shape until 2008, when system unit shipments are forecast to rise 14% and dollar volumes to increase 11%.

The 2007 edition of IC Insights’ Integrated Circuit Market Drivers is now available. The report provides a study of emerging and major end-use applications fueling demand for ICs in the second half of this decade. Packed with numerous tables providing 10,000 market data points, the IC Market Drivers report will be available in both a three-ring binder and on CD-ROM, costing $2,685 for the first bundled set. Additional individual copies of the disk or binder will sell for $495 each. A single CD-ROM or binder copy will be available for $2,190 each. The report is also available under a multi-user corporate license for $5,490.

About IC Insights

IC Insights, Inc., based in Scottsdale, Arizona, is dedicated to providing high-quality, cost-effective market research for the semiconductor industry. Founded in 1997, IC Insights offers coverage of global economic trends, semiconductor market forecasts, capital spending and fab capacity trends, product market details, and technology trends, as well as complete IC company profiles and evaluations of end-use applications driving demand for ICs.

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