A favourable supply environment driven by increased fab utilisation and falling inventory levels led the worldwide semiconductor industry to grow 11.8% in 2003, with revenue totalling $175 billion, according to preliminary statistics from Gartner.
This is considered a sharp turnaround from 2002, when worldwide semiconductor revenue increased by 2%.
However, Gartner reports that 2003 was still a mixed year for semiconductor manufacturers.
"Companies with greater exposure to commodity markets like flash memory and DRAM were able to outgrow the market," says Jeremey Donovan, VP for Gartner`s worldwide semiconductor group. "This is a complete reversal of fortune as these companies suffered more than specialty application semiconductor vendors in the 2001-2002 downturn."
Intel remained the number one vendor based on worldwide semiconductor revenue in 2003, with 16% of the market for the 12th consecutive year. Samsung was in the second position, followed by Renesas Technology. This is the first time that Renesas Technology, a joint venture between Japanese companies Hitachi and Mitsubishi Electric, is reported in the Gartner rankings. In 2003, Hitachi and Mitsubishi were ranked 10th and 11th, respectively.
For two years, Samsung`s growth was aided by strong NAND flash memory sales. "Samsung had another excellent year with growth nearly twice that of the overall market," Donovan says. "The company made a strategic decision at the start of 2003 to shift production from DRAM to NAND flash to take advantage of stronger average selling prices."
Toshiba grew 15%, benefiting from strong NAND flash memory sales. As with several other Japanese semiconductor vendors, Toshiba was also aided by the strength of the yen relative to a weakened dollar.
By growing in excess of the industry average, Texas Instruments (TI) was a standout among vendors that are more focused on specialty applications as opposed to commodity device markets. The company continued to maintain a strong position in the wireless semiconductor business. On Monday, TI raised its fourth quarter guidance on revenue and earnings due to strong semiconductor sales and the sale of another chipmaker, Micron Technology.
NEC Electronics, which separated from its parent in July, had a mixed year with weakness in sales of devices to the consumer game console segment being offset by strong sales to the wireless handset and automotive segments.
Overall, the big three European semiconductor vendors had mixed performances. Infineon Technologies had the strongest growth with 33%, due to a combination of product growth in wireless and DRAM, as well as favourable exchange rates. Driven by wireless and digital-consumer products, ST Microelectronics grew 12%. Philips struggled during the first half of 2003, but the company began seeing strong sequential growth during the third quarter in its digital-consumer semiconductor segment.
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