Tue, Dec 18, 2012 - Page 14 News List

Gartner expects 3% drop in semiconductor revenue

WORLD RANKINGS:Intel remained at the top for the 21st straight year, followed by Samsung. Qualcomm beat the downtrend on strong smartphone demand

By Helen Ku  /  Staff reporter

Worldwide semiconductor revenue has contracted this year from last year, missing projections of a mild growth made in the first half of the year, market researcher Gartner Inc said in a recent report.

Preliminary results released by Gartner showed that worldwide semiconductor revenue has reached US$297.6 billion so far this year, down 3 percent from US$306.84 billion a year ago.

The semiconductor industry was expected to see slight growth in the first half of the year, with orders picking up in the second half and supporting a recovery next year, Gartner said.

However, the expected growth did not materialize this year, with orders last quarter failing to meet seasonal expectations and guidance for this quarter showing further declines.

“Uncertainty about the state of the macroeconomy, coupled with ongoing inventory overhang, sent ripples through the semiconductor industry,” Gartner research director Steve Ohr wrote in a statement.

“The hardest-hit areas include the PC supply chain, memory, analog and discrete components. The PC business, ordinarily a growth driver, was on a negative slope for the first time in many years. PC production declined 2.5 percent in 2012. Even the smartphone juggernaut had begun to show signs of maturing, though it remained the strongest driver for revenue growth in 2012,” Ohr wrote.

On an annual basis, US chip giant Intel Corp’s semiconductor sales are expected to reach US$49.3 billion this year, a 2.7 percent decline from US$50.67 billion last year, Gartner said.

However, despite failing to achieve growth this year, Intel is expected to maintain its leading position in the semiconductor market for the 21st consecutive year, with a 16.6 percent market share, its best performance ever, Gartner said.

In second position is South Korea’s Samsung Electronics Co, which is expected to see its semiconductor revenue fall 8.7 percent to US$24.97 billion from US$27.37 billion last year because of declines in its three major product areas: DRAM, NAND flash and system logic chips. Samsung will have a market share of 8.4 percent this year, Gartner said.

Supported by growing adoption of smartphones compatible with 3G and 4G Long Term Evolution (LTE) technologies in China and India, US handset chip developer Qualcomm Inc outperformed, with sales posting a double-digit annual growth rate of 29.6 percent to US$12.95 billion from US$10 billion a year ago. Qualcomm was No. 3, with a market share of 4.4 percent.

As a group, memorychip makers suffered the most. DRAM makers suffered from rapid price declines, while the NAND flash market also saw steep price declines as a consequence of sluggish bit growth, Gartner said.

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