Demand for consumer electronics helped the global semiconductor market hit a new record in 2006, with sales topping a quarter of a trillion dollars.

The Semiconductor Industry Association (SIA) reported said on Friday that sales in the semiconductor market hit $247.7 billion this year, up 8.9 percent from $227.5 billion in 2005.

December sales declined 3.6 percent to $21.7 billion compared to November. Looking at the previous year's total, the monthly total represented an increase of 9 percent. Sales in the fourth quarter also rose 9 percent to $65.2 billion year-over-year. The three-month moving average declined 1.9 percent.

2006 was the ‘Year of the Consumer’ in the electronics industry, said SIA President George Scalise.

Sales growth was largely driven by popular consumer products such as cell phones, MP3 players, and HDTV sets – all products that have proliferated as semiconductor technology has enabled dramatically lower costs coupled with improved functionality.

Over 1 billion cell-phones were shipped in 2006, with emerging markets sparking demand for low-end cell phones, SIA said. Portable music players were also in high demand this year.

More than 34 million MP3 players were sold in the U.S. in 2006, Scalise added. While the growth rate for MP3 players is likely to slow going forward, the semiconductor content of these devices is growing as a result of increased storage capacity and addition of new functionality such as video capability.

Preliminary estimates on PC sales indicate that 235 million units were shipped in 2006, but growth appeared to slow as a result of high market penetration. HDTV sales will continue to grow at a fast pace, SIA said.

With healthy economic conditions expected to continue in major markets, SIA is forecasting that the semiconductor market will grow 10 percent to $273.8 billion in 2007.