SAN JOSE – September semiconductors sales set another high as manufacturers geared up for the fourth-quarter holiday season. Global chip sales reached $21.4 billion, up 9.3% year-over-year and 4.2 % sequentially, on strong demand for cellphones, MP3 players and PCs, the Semiconductor Industry Association said today.

For the quarter, global semiconductor sales were $64.1 billion, up 8%. Year-to-date, sales reached $182.6 billion, up 8.9% and on pace for a record.

“Sales of cellular telephones remained strong, especially in India and China,” said said George Scalise, president of SIA. “PC manufacturers are now producing systems designed for the new Windows Vista operating system, which is contributing to strong demand for DRAMs."

DRAM sales rose 10% sequentially and 40% over last year, he said, due to growth in bit demand and tightening supply. Microprocessor sales rose 4% from August but fell 11% from a year ago on pricing pressure.

“With prospects for healthy sales in the seasonally strong fourth quarter driven by strong consumer demand, the industry is on pace to meet our mid-year forecast of 9.8 percent sales growth for 2006,” Scalise said.

SIA will release its revised 2006-09 forecast on Nov. 16.

According to VLSI Research, capacity utilization should grow to around 95% for the remainder of 2006, an increase from the second-quarter utilization rate of 92%. Sales grew in all geographic regions in September.