Gartner raised its revenue forecast for the global chip industry on Wednesday, saying stronger than expected demand for PCs, LCD TVs, mobile phones and other devices in the second quarter boosted demand for chips.
The market researcher expects global chip revenue to reach US$212 billion this year, down 17.1 percent from $255 billion last year.
The new figure represents a smaller decline than the 22.4 percent drop previously forecast.
"The semiconductor market has performed better than expected, as was evident when second quarter semiconductor revenue increased 17 percent in sequential sales," Gartner analyst Bryan Lewis wrote in a statement.
Aside from stronger consumer demand in several product segments, he said China's stimulus package "worked remarkably well to boost short-term demand. Governments worldwide took action quickly and extensively to avoid a meltdown, and it worked."
Chip demand next year remains questionable, Gartner said.
The forecaster expects chip revenue to rise 10.3 percent to $233 billion next year, but noted concerns that consumer demand for electronics gear may fall faster than normal near the end of this year and in the first quarter next year because people have already bought a lot of new devices and may put off new purchases for a while.
Gartner said worldwide chip revenue may decline 5 percent in the first quarter of 2010.