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18 December 2009 ,
Written by Dhruv Tanwar
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Information technology research and advisory firm Gartner Inc. has said that the semiconductor industry will post a revenue decline for just the sixth time in the last 25 years, with worldwide revenue totaling $226 billion in 2009, marking an 11.4 percent decline from 2008. This year ranks as one of the worst for the semiconductor industry since the burst of the dot-com bubble in 2001, and is the first year the semiconductor industry posted declines two years in a row.
Worldwide semiconductor revenues declined 4.4 percent in 2008, a consequence of the worldwide economic recession, which began in the fourth quarter, Gartner said. "Revenue dropped precipitously in the first quarter of 2009, continuing a deterioration which started in the last quarter of 2008," said Stephan Ohr, semiconductor research director at Gartner. "A small uptick, noted toward the end of the first quarter, led to significant quarter-over-quarter growth in the periods that followed."
Ohr said that as the market emerges from recession, semiconductor vendors would have to track end users' spending patterns through 2010 in order to detect any disruptions in demand or additional demands that outstrip capacity. "Neither the recession nor its recovery was felt equally by all semiconductor vendors. The PC segment was the first to spring back, followed later in the year by other segments reflecting consumer sentiment, like cell phones and automobiles. Enterprise spending was most deeply impacted by the recession and remains slow to recover."
Some semiconductor vendors were worse off with the recession than others. Japanese vendors were very hard hit, first by the world recession that curtailed orders and then by the strong Japanese yen that made Japanese products uncompetitive vis-a-vis American and European devices.
Intel held the top slot for the 18th consecutive year despite revenue declines and even increased market share to 14.2 percent during 2009. , Gartner says just three of the top 10 semiconductor vendors saw revenue growth in 2009, two of whom were memory manufacturers – Samsung and Hynix – whose revenue grew primarily because of the long-awaited firming of memory prices. Qualcomm grew slightly by capturing market share among cellular baseband processors.
Outside the top 10 but within the top 25, Taiwan's MediaTek grew 21.4 percent due its strong position among off-brand Chinese cell phone makers. It was the only company within the top 25 to show double-digit growth.
Four of the seven companies in the top 10 showing revenue declines experienced double-digit declines, Gartner points out. Infineon witnessed a precipitous 46.5 percent drop as a consequence of the failure of its memory business unit, Qimonda, and the sale of its wireline communications business.
Gartner said the memory segment deserves special attention, since much of what happened in 2009 appears contrary to what happened in other segments. After witnessing revenue declines in 2007 and 2008, the memory market was one course for a recovery, with memory vendors having slashed capital spending during the previous years and supply constraints effectively elevated pricing. NAND flash moved into an under supply condition at the start of 2009; DRAM followed late in the second quarter of 2009, sending prices soaring. However, the bankruptcy of Qimonda and near collapse of some of the weaker Taiwanese players meant most of the major DRAM vendors were able to acquire market share at the expense of these companies and even report revenue growth. Overall, memory revenue declined in 2009, but by significantly less than the entire semiconductor industry, Gartner said. |