Global chip sales increased to a record US$227.5 billion in 2005, according to the Semiconductor Industry Association (SIA).

The yearly rise in sales was 6.8 percent, with chip sales for December 2005 increasing 8.6 percent to $19.95 billion from the same period a year ago, the SIA said. Likewise, sales for the fourth quarter of 2005 also jumped 8.6 percent to $59.86 billion from the same period a year ago and were up 2 percent from third-quarter figures.

Global chip sales for December did dip 2.2 percent from November, but this trend is consistent with seasonal fluctuations leading up to the holiday shopping season, according to the SIA.

It's hard to tell whether rising energy prices will take a toll on semiconductor sales in the coming year, SIA President George Scalise said. But he was optimistic because surging energy costs and the natural disasters in the past year didn't appear to negatively affect the industry.

Overall growth is still being driven by strong demand for consumer electronics and PCs,

The SIA predicts worldwide chip sales will increase 7.9 percent in 2006 to $245 billion and will reach $309 billion in 2008, driven in part by strong demand for DSPs (digital signal processors) and flash memory used in consumer electronic devices. DRAM (dynamic RAM) memory chips, however, are expected to slightly decline.

The SIA's figures also reflect the continuing migration of electronics manufacturing to the Asia-Pacific region. Semiconductor sales in that region jumped 20 percent to $9.3 billion in December of 2005 from the same year-ago period. The region accounted for nearly 50 percent of the global market for microchips in 2005, with China taking the lion's share.