Semiconductor sales grew 9.4 per cent, year over year in May, fuelled by strong demand for mobile phones and consumer electronics, the Semiconductor Industry Association (SIA) said on Monday.

Global chip sales rose to $19.7 billion in May, up from $18.1 billion during the same month last year, and also up slightly from April.

Healthy sales of personal computers also contributed to strong chip demand, the SIA said, pumping up DRAM (dynamic RAM) growth to 13.7 per cent in May.

But heavy demand for chips isn't driving up prices. Users are benefitting from strong competition, since the average price of a notebook computer dropped below $1,000 for the first time, the SIA noted.

Chip sales should remain strong going forward. "We expect to see global semiconductor sales running 9 per cent to 10 per cent ahead of last year's pace for the next several months. End market demand, inventory levels, and capacity utilisation all indicate generally favourable conditions for the industry," said George Scalise, president of SIA, in a statement.

The industry association, which has represented chip companies since 1977, in June raised its forecast for 2006 worldwide chip sales growth to 9.8 per cent from 7.9 per cent.

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