SAN JOSE, Calif. -- The IC market is hot. And another research firm raised its chip forecast. But the firm warns about a slowdown and ''correction'' in the second half.

Worldwide chip revenue is forecast to reach $290 billion in 2010, a 27.1 percent increase from 2009 revenue of $228 billion, according to Gartner, Inc.

The outlook for the semiconductor industry has improved from Gartner's first quarter 2010 forecast, when it projected worldwide semiconductor sales to grow 19.9 percent.

Gartner analysts expect the semiconductor industry to show continued growth through its forecast period in 2014. The market is on track to surpass the $300 billion mark in 2011, when the market is forecast to total $307 billion.

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

"Chip revenue growth is clearly outpacing system revenue growth and that is a concern. Gartner's new semiconductor forecast has below-average growth in the second half of 2010 as we are anticipating a minor correction to realign semiconductor sales with electronic system sales,'' he said.

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

In this quarter's update, Gartner raised production forecasts for PCs, mobile phones, automotive and select consumer products. The PC and mobile phone markets will account for about 40 percent of the semiconductor market's growth in 2010, according to Gartner.

In the PC market, processor average selling prices (ASPs) are firming, and 2010 PC processor revenue is now expected to grow 15.5 percent, up from 10.0 percent in the previous update.

Strong PC growth coupled with rising DRAM prices is causing the 2010 DRAM market to surge 78 percent, making it the strongest-performing semiconductor device market.

Source : EETimes.com