The Semiconductor Industry Association said today that chips sales were up 5.5 percent in August compared with the year before, but cautioned that since more than half of chips go into consumer devices, the U.S. Congress needs to act to stabilize the economic situation. SIA president George Scalise added his pleas to those of other tech industry leaders saying, “consumer confidence is essential to the entire supply chain of the global technology sector.”

A decade ago that wouldn’t have rung true, but today even my two-year old has an MP3 player. The continued consumerization of technology — from moms keeping their schedules on BlackBerries to teens toting cell phones, laptops, MP3 players and digital cameras — means more chips are selling into gadgets than into servers.

Driving that point home, SIA said PCs and cell phone sales were a large part of the overall growth. Citing a recent Credit Suisse report, the association said PC unit sales were up 9.1 percent in August and are projected to grow more than 13 percent this year. Cell phones are expected to rise 10 percent, driven by emerging markets. Global chip sales totaled $22.7 billion in August, and so far this year chipmakers have sold $170.2 billion in semiconductors, despite a slump in memory prices.  Apparently the $700 billion bailout plan could add a few more billions to the chipmakers’ top lines.