UPDATE 1-Taiwan's Ralink eyes 20 pct sales growth in 2008

* Company aims for 20 pct annual growth in 2008 sales

* Q3 sales seen up 10 pct vs Q2

* Profit margin stable despite slowing economy

(Adds quotes and details)

By Baker Li

HSINCHU, Taiwan, Sept 4 (Reuters) - Ralink Technology Corp (3534.TW), Taiwan's largest designer of wireless chips, is aiming for 20 percent annual growth in 2008 sales, thanks to rising demand for laptops and as new products help cut costs.

While that's below analysts' expectations, the sales growth will still far outpace the meagre 4 percent rise analysts project for the entire $280 billion semiconductor industry this year, due partly to slugglish sales of computer memory chips. Competing with larger rivals such as Intel (INTC.O), Broadcom (BRCM.O), Atheros (ATHR.O) and Marvell (MRVL.O), Ralink shipped 30 percent more wireless chipsets based on the Wi-Fi standard in 2007, with a 10-12 percent share of the global market.

For years, Intel has helped popularise Wi-Fi, or the 802.11 wireless networking standard, by equipping portable computers with it, allowing users to access the Internet in coffee shops or other wireless hotspots.

"The laptop segment is a market where we see stronger growth this year," Tina Chen, an investment director with the firm, told Reuters in an interview on Thursday.

The powerful short-range wireless Internet access system is also making inroads into a new crop of consumer gizmos coming out with wireless chips, from cellphones through game consoles to TV set-top boxes.

Ralink expects third-quarter sales to grow 10 percent from the second quarter, Chen said, despite a slowing U.S. economy hurting consumer spending.

"If 10 percent is achievable in the third quarter, 20 percent growth should be no problem," she said, when asked about the firm's sales target for this year.

"We don't have forecasts for the fourth quarter now but, even in an industry downturn, I still have confidence in Ralink and potential of the wireless chip market."

Chen declined to give dollar figures, while analysts had expected Ralink's 2008 sales to grow by about one-third annually to reach T$5.23 billion ($164 million), Reuters Estimates showed.

As a fabless chip company, Ralink designs wireless chips for PCs and networking equipment, then contracts the manufacturing out to foundries, such as TSMC (2330.TW) before shipping to Acer (2353.TW), Asustek Computer (2357.TW) and other clients.

For the seven-year-old company, the key to its success is value-added products -- Ralink is pumping out new integrated chips that have fatter margins and allow portable devices to consume less power.