The global recession which has led to a steep decline in the semiconductor market in 2008, is expected to continue through 2009. According to a study by research firm Gartner, the worldwide semiconductor market fell 5.4 per cent to $255 billion compared with the market in 2007.
The analyst firm says that the steep decline in the market in the fourth quarter of 2008, combined with the ongoing economic weakness, signals far worse declines in 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. The sales were deteriorating quickly by the fourth quarter causing revenue growth to go into negative territory,” said Peter Middleton, principal research analyst at Gartner.
Gartner’s annual semiconductor marketshare analysis examines and ranks the worldwide and regional revenue for over 275 semiconductor suppliers. It judges the suppliers in 65 product categories and eight major market categories.
As per the analysis, Intel held the number one position for the 17th consecutive year, increasing its marketshare to 13.3 per cent in 2008. The company, however, saw its revenue declining by 0.5 per cent. The company however outperformed the industry average due to the strong performance of its notebook business in which the company gained share throughout the year.
Qualcomm, the 11th largest semiconductor firm globally was the best performer among the 2008 top 10 in Gartner’s marketshare analysis, with a revenue growth of 15.3 per cent. The growth was primarily driven by the company’s strong growth in the first three-quarters of the year. Among the other firms who saw a marginal increase in their revenue during the year include STMicroelectronics and NEC Electronics.
Samsung, the number two semiconductor vendor, saw its revenue decline 15 per cent in 2008 with the company’s main product lines, dynamic RAM (DRAM) and NAND flash experiencing sharp price declines caused by excess supply in the market during 2008.
More From This Section
Toshiba, presently stands third in the list of the semiconductor vendors, witnessed a revenue decrease of 10.3 per cent. The fall is largely because the market for its application-specific integrated circuit (ASICs) and application-specific standard products (ASSPs) for consumer, wireless and automotive electronics went into free-fall in the second-half of the year due to the downturn.
“With the market heavily impacted by the recession, we can expect considerable market consolidation going forward,” Middleton added.