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Analyst Raises Chip Market Growth Forecast

Pacific Crest now believes the annual growth rate of the chip market this year will be 7.4%, up from 4.2%.
LONDON — Investment banking firm Pacific Crest Securities Inc. has raised its industry growth forecast for the second time in 2005.

The latest forecast has raised the chip market annual growth forecast to 7.4 percent, up from 4.2 percent, prompted by reports of higher unit sales. Pacific Crest now predicts that 455.6 billion of semiconductor components will be sold in 2005 worth $228.4 billion.

“We now expect unit sales to rise 5.1 percent year over year, compared with our prior estimate of 1.6 percent. Our ASP [average selling price] estimate of 2.4 percent year-over-year growth remains unchanged,” said Pacific Crest (Portland, Oregon) in a note issued Tuesday (Nov. 22).

The company set its previous growth figure in May 2005 when it raised its IC forecast to positive 4.2 percent growth in 2005, up from minus 4 percent.

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