China's growing demand for computers and mobile phones will fuel strong growth in the global microchip market, an industry body has said.
Prices have been cut this year
Worldwide chip sales are expected to rise by 8.6% next year and then grow 12.1% in 2008, the World Semiconductor Trade Statistics (WSTS) has forecast.
The Asia-Pacific region will account for most of the growth, led by China.
But the body has revised down its 2006 growth forecast from 10.1% to 8.5% because of weak second quarter sales.
Intel, the world's largest chipmaker, struggled with production and supply problems earlier this year although it has since reported record shipments of chips for mobile phones and computer servers.
Growth forecasts for 2008 were predicated on a "challenging yet generally healthy world economy", WSTS added.