X
Business

Chip sales on upswing

Semiconductor revenues in 2005 will rise to US$235 billion, the highest in the past five years, Gartner projects.
Written by Dinesh C. Sharma, Contributor

Global semiconductor revenue is predicted to reach US$235 billion in 2005, market research firm Gartner said Friday.

That exceeds the US$223 billion reached in 2000 and amounts to a 6.9 percent increase over 2004. The companies that participated in high-growth device markets such as NAND flash, and those who aligned themselves with successful original equipment manufacturers have gained the most, Gartner reported.

"Strong growth in the NAND flash market was a recurring theme in the 2005 market share rankings," Andrew Norwood, research vice president at Gartner, said in a statement. "The continuing strong demand for flash cards and USB flash drives in 2005, along with the successful launch of the iPod Shuffle by Apple (Computer) at the start of 2005 and the release later in the year of the iPod Nano, will drive this device market to the highest revenue performance in 2005."

Intel retained its top position, recording revenue growth of 14.3 percent. This year, the chipmaker's growth was double the market average, unlike the previous three years, when the growth was lower than the market average. Samsung, with 7.6 percent of the market, was ranked second. It holds the top position in certain categories: DRAM, SRAM and NAND flash markets.

Texas Instruments retained its No. 3 position, while Toshiba moved from seventh to fourth place, Gartner said.

Hynix Semiconductor figures in the top-10 ranking for the first time. Its revenue from NAND flash chips is projected to rise to US$1.5 billion, up from US$212 million in 2004. Philips Semiconductors, which was in the ninth position in 2004, and Freescale Semiconductor were out of the top-10 list. But, Gartner analysts said, these two firms could make it again to the top rankings next year.

Infineon and Advanced Micro Devices, both in the top 10 this year, are planning initial public offerings for their respective memory operations in 2006, and this would result in smaller vendors placed outside the top 10.

Gartner said its relative industry performance index measured the difference between industry-specific growth for a company and actual growth. On this index, Hynix Semiconductor got the best ranking by outgrowing its category by 23.4 percent. Elpida Memory and AMD (including its joint venture with Fujitsu, Spansion) have gained share in their existing markets. NEC and Infineon underperformed their respective markets by more than 10 percent.

"Semiconductor manufacturers need to watch the performance of their end customers ever more closely, as a major part of the industry becomes increasingly tied to consumer spending patterns," Norwood said. "The loss of market share in an end application such as mobile phones by a vendor customer can have a dramatic effect on the semiconductor vendor's business."

Editorial standards