Gartner Raises 2010 Chip Sales ForecastGartner Raises 2010 Chip Sales Forecast

Semiconductor revenue will increase by 27.1% from last year to $290 billion, Gartner predicted Thursday. The analyst firm had projected growth of 19.9%.

"Sequential semiconductor growth has been very strong over the last five quarters, well above seasonal norms, and manufacturing capacity is tight," Gartner analyst Bryan Lewis said in a statement.

However, Lewis warned that semiconductor sales were outpacing revenue from the electronic systems that use the chips. Therefore, the market was likely headed for a "minor correction" in the second half of the year.

"Even with this minor correction, we are still expecting very strong growth and record semiconductor sales in 2010," he said.

Gartner has also raised first-quarter production forecasts for PCs, mobile phones, automotive and select consumer products. PCs and mobile phones are expected to account for 40% of the semiconductor market growth this year.

For the full year, PC processor revenue is expected to increase by 15.5% from 2009, up from 10% in Gartner's previous forecast.

Strong PC sales worldwide coupled with rising prices are expected to drive the DRAM market up 78% this year, making it the strongest-performing semiconductor category, Gartner said. DRAM is mostly used for the system memory of computers.

Gartner expects the semiconductor industry to see growth through the end of its forecast period in 2014. The market is currently on track to surpass the $300 billion mark in 2011, when the market is expected to total $307 billion.