Monday, April 30, 2012

Worldwide semiconductor market grew 3.7 percent in 2011 to $301 billion, 6-7 percent revenue growth likely in 2012

SAN MATEO, USA: Worldwide semiconductor revenues increased more than 3.7 percent year over year to $301 billion in 2011, according to the latest version of the International Data Corp. (IDC) Worldwide Semiconductor Applications Forecaster (SAF).

The industry weathered the macroeconomic uncertainties in the U.S and Europe, the earthquake and tsunami in Japan, China's slow down in the second half of the year, and floods in Thailand. Meanwhile, device applications, such as smartphones, media tablets and e-readers, automotive infotainment, notebook PCs, datacenter servers, and wireless and wired communication infrastructure drove robust consumption of semiconductors.

IDC's SAF tracks more than 100 semiconductor companies. Over 40 of these companies experienced year-over-year revenue growth greater than 5 percent, while about the same number of companies saw their revenue decline by more than 5 percent.

Intel, with total semiconductor revenues of $51.8 billion in 2011, once again was the overall market leader. It registered impressive revenue growth and also increased its share of the semiconductor market by three percent. Samsung was the number two vendor overall with semiconductor revenues of $29 billion.

Rounding out the top 5 chip suppliers were Texas Instruments, Toshiba, and Renesas Electronics, the latter two benefiting from the strong yen relative to the US dollar. The next five suppliers were Qualcomm, Hynix, STMicro, Micron, and Broadcom. Together, the top 10 vendors represented 53 percent of total worldwide semiconductor revenues, an increase of 3 percent over 2010. The top 25 vendors captured 72 percent of overall semiconductor revenues for the year.

Many companies grew revenues substantially over the industry average. For example, Apple enjoyed an impressive 140 percent year-over-year semiconductor revenue growth. Other large companies with strong year-over-year growth were ON Semiconductor, Intel, Qualcomm and Renesas Electronics. Notable small-to-medium sized companies experiencing strong growth in 2011 were Spredtrum Communications, CoreLogic, Microsemi, Sequans, Icera, MegaChips, Nichia Chemical, Osram, RobertBosch, Skyworks, and Cavium. All these companies benefited from strong growth in the wired and wireless communications, consumer, automotive, and industrial market segments.

Within the semiconductor device types, microprocessors registered strong growth due to high demand and increased ASPs for Intel's chips. Similarly, NAND revenues also increased. However, DRAM saw revenue decline more than 25 percent due to supply glut and falling ASPs. Pure play DRAM vendor Elpida Memory saw revenue declines of 40 percent in 2011, ultimately leading to its bankruptcy earlier this year.

Both Asia/Pacific and Americas showed growth above the industry average, while Japan and Europe showed negative growth. Among the market segments, semiconductor revenues for the computing segment declined year over year due to the DRAM price collapse. The consumer segment was essentially flat, while wireless communication and automotive segments registered over 10 percent year-over-year semiconductor revenue growth.

"There is a trend underway toward more integration, as companies try to position themselves for the next phase of growth and as device applications become more and more intelligent and move toward supporting high-level operating systems, connectivity, and application processing capabilities. In addition, as large companies with strong cash balances vie for competitive positions, mergers and acquisitions will be a key theme," said Mali Venkatesan, research manager, Semiconductors at IDC, who led the study and compiled the SAF results.

A number of mergers and acquisitions came to fruition in 2011, most notably Qualcomm–Atheros, Texas Instruments–National Semiconductor, SMSC–Conexant, Broadcom–NetLogic, CSR–Zoran, and Microsemi–Zarlink. This trend is expected to continue in 2012.

"As mentioned in IDC's 2012 predictions for the worldwide semiconductor market, the current semiconductor cycle, which started mid-2011, will bottom out in the second quarter of 2012 and fab utilization rates will pick up and accelerate in the second half of this year. Overall, IDC expects 2012 semiconductor revenue growth to be in the 6-7 percent range," added Venkatesan.

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