Semiconductor revenue plummets

By Staff Writer for Gartner

Johannesburg, 09 Apr 2009

Global semiconductor revenue totalling $255 billion in 2008, has fallen by 5.4%, a decrease of $14.5 billion from 2007 revenue, according to the final market share analysis by Gartner.

Gartner says the steep decline in the market in the final quarter of last year, combined with the ongoing economic weakness, signals far worse declines for 2009.

“While sales held up fairly well in the first half of 2008, in the third quarter the industry started to soften as the economy slowed, and by the fourth quarter sales were deteriorating quickly, causing revenue growth to go into negative territory,” says Peter Middleton, principal research analyst at Gartner. “With the market heavily impacted by the recession, we can expect considerable market consolidation going forward.”

Gartner's annual semiconductor market share analysis examines and ranks the worldwide and regional revenue for more than 275 semiconductor suppliers, in 65 product categories, and eight major market categories.

The analyst says it serves as a benchmark for both semiconductor industry performance, as well as a means for individual companies to assess their revenue performance against their competitors.

Top performers

According to the report, Intel held the number one position for the 17th consecutive year, increasing its market share to 13.3% in 2008, although it saw its revenue decline by 0.5%.

Gartner says this is a consequence of Intel spinning off its flash memory business. The company outperformed the industry average due to the strong performance of its notebook business in which the company gained share throughout the year.

The best performer among the 2008 top ten in Gartner's market share analysis was Qualcomm, with growth of 15.3%. Samsung came second, but saw its revenue decline 15% in 2008 with the company's main product lines, Dram and Nand flash, experiencing sharp price declines caused by excess supply in the market during 2008.

Toshiba, in third place, saw its revenue decrease 10.3%, largely because its application-specific integrated circuit and application-specific standard products for consumer, wireless and automotive electronics showed mild growth in early 2008. Garner says the market went into free-fall in the second half due to the global economic downturn.