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Semiconductor industry revenue declines for 2008

by Scott Bicheno on 12 December 2008, 10:19

Tags: Gartner (NYSE:IT)

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As expected

The total worldwide revenue for semiconductor companies has been estimated by market researcher Gartner to decline by $12 billion - 4.4 percent - to $261.9 billion in 2008.

Gartner research VP Andrew Norwood warned that he doesn't think the worst is over. "In the last quarter of 2008, market conditions deteriorated significantly, and as the fourth quarter has progressed, many vendors have issued updated guidance for the quarter, reflecting weakening market conditions," he said.

"Unfortunately for vendors, 2009 is going to be considerably worse. Some have compared the precipitous decline in semiconductor demand to that of the 2001 ‘dot-com' bubble. However, unlike 2001, this economic downturn is much more broad-based and not limited primarily to the technology sector.

"Given this increased uncertainty, all semiconductor companies should be focused on cash preservation and inventory management," Norwood continued. "While gross margin for IDMs (integrated device manufacturers) will show significant declines owing to under-utilized factories, focusing on inventory now should help the recovery when demand returns. This is also an excellent opportunity for the larger companies with stronger balance sheets to make strategic acquisitions."

Such as Intel? The chip giant retains the number one spot and, if you allow for the spin-off of its NOR flash memory business, managed growth of 6.5 percent.

Here's the top ten, note that many of the biggest fallers are heavily exposed to the DRAM market, where prices have been dropping rapidly.

Top 10 Preliminary Worldwide Semiconductor Vendors by Revenue Estimates (Millions of U.S. Dollars)

2008
Rank

2007
Rank

 

Company

2008 Revenue

2008 Market Share (%)

2007

Revenue

2007-2008

Growth (%)

1

1

Intel

34,187

13.1

33,800

1.1

2

2

Samsung Electronics

17,900

6.8

20,464

-12.5

3

3

Toshiba

10,510

4.0

11,820

-11.1

4

4

Texas Instruments

9,792

3.7

11,768

-16.8

5

6

STMicroelectronics

9,652

3.7

9,966

-3.2

6

5

Infineon Technologies (incl. Qimonda)

8,078

3.1

10,194

-20.8

7

8

Renesas Technology

7,849

3.0

8,001

-1.9

8

11

Qualcomm

6,463

2.5

5,619

15.0

9

7

Hynix Semiconductor

6,400

2.4

9,100

-29.7

10

12

NEC Electronics

5,889

2.2

5,593

5.3

 

 

Others

145,180

55.4

147,586

-1.6

 

 

Total

261,900

100.0

273,911

-4.4

Source: Gartner (December 2008)

 



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