Worldwide chip sales increased by 8.1% in April, reaching $19.7 billion, according to the Semiconductor Industry Association.

Strong sales of analog and digital signal processor chips used in cell phones helped offset a 6.1% sequential decline in microprocessor revenue, which the SIA attributed to intense competition.

"The overall market growth rate continues to run slightly ahead of the SIA forecast issues last November, which projected growth of 7.9% (for all of 2006)," said SIA President George Scalise in a statement. The SIA will provide an update to its outlook for the chip market in 2006 on June 7.

April chip sales were roughly flat compared with March levels, but up from the $18.1 billion in sales in April of 2005.

Despite the sequential slump in microprocessor sales, Scalise said the PC market remained strong, pointing to PC unit shipments that are 13% to 15% higher than last year's levels and sales of DRAM memory chips that grew 7.7% year over year.

The SIA figures seemed to suggest that April's decline in microprocessor revenue is a result of lower prices, as

Intel

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has adopted a strategy of aggressive price cuts to fend off competition from

Advanced Micro Devices

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.

Analog chip sales jumped 23% year over year, while DSP sales increased 16.1%.

NAND flash chips, a popular form of storage for MP3 players and digital cameras, saw sales decline 11.7% from the month before but were up nearly 25% year over year.