Intel Corp won the title of world's largest communications-chip maker as the biggest maker of computer processors added fresh designs to shore up sales in new markets, researcher Gartner Inc said.
Revenue in the overall market slumped 38 percent, and Intel performed better than rivals. Intel's communications-chip sales fell to US$2.73 billion from US$3.51 billion in 2000, when it ranked No. 3 behind Motorola Inc and Texas Instruments Inc.
Intel has been trying to build sales outside its Pentium personal-computer processors. The Santa Clara, California-based company added networking chips in the early 1990s and starting a string of acquisitions in 1997 that brought more communications expertise. Chief Executive Craig Barrett in 1998 set the goal of becoming No. 1 or No. 2 in that market.
"Intel fared relatively well because much of its revenue derives from sales of flash memory -- a business that fared relatively well," Gartner Dataquest communications-semiconductor analyst Joseph Byrne wrote in a report.
Gartner's definition of communications chips includes flash memory, which saves data when devices like cell phones are shut off, network processors, custom chips, signal processors and circuits that handle so-called local area networks or LANs. Fiber-optic parts are taken separately.
Intel is the world's biggest maker of flash. While sales in that market slipped, demand held up better than many other communications products, Byrne said. Intel also picked up market share in LAN connections, he said.
Communications clients added inventory in 2000 before demand fell. That meant customers had more than enough semiconductors on hand to fill orders, so sales at chipmakers plunged. Many young companies that had made big purchases in the boom failed, and some older clients are now staggering with debt.
Total communications-chip sales plummeted to US$40.4 billion in 2001 from US$64.7 billion in 2000, according to Gartner. While Intel's sales in that market slipped 22 percent, Texas Instruments dropped 33 percent and Motorola sank 45 percent.
Texas Instruments remained No. 2; Motorola fell to third.
Other big moves included STMicroelectronics NV's jump to fourth from seventh, and Qualcomm Inc's rise to No. 8 from No. 13.
Qualcomm was the only manufacturer in the top 20 to increase sales, with its communications-chip revenue up 15 percent as more customers adopted its design.
Gartner also gave sales for fiber-optic components. Sales declined 38 percent in 2001 to US$7.39 billion from US$11.9 billion in 2000.
JDS Uniphase Corp ranked first with 26 percent of the market, up from second place in 2000. Previous market leader Nortel Networks Corp slid to fourth, as its sales slumped 79 percent.
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