Semiconductor Market Declines Less Than Expected
Dec 3, 2009
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Although the global semiconductor industry has little to cheer about in 2009, with revenue dropping by 12.4% and only one of the Top-10 suppliers achieving growth for the year, there is one source of solace for the battered chip makers: it could have been much worse, said an iSuppli report.

"The year 2009 will be remembered as one of the most dismal years in the history of the global semiconductor business, with a plunge of more than $32 billion in revenue compared to 2008,” said Dale Ford, senior vice president at iSuppli Corp. “However, iSuppli’s preliminary estimate of a 12.4 percent decline is far better than expectations from early 2009 of a more than 20% plunge.

The report said that the better-than-expected results in 2009 are attributable to a surprisingly strong performance in the memory market as well as in sales of chips for consumer electronics and wireless products.

According to the report, only Samsung is expected to achieve growth in semiconductor revenue in 2009: Samsung Electronics Co. Ltd. of South Korea. While the company is set to expand its revenue by only 1.3%, the report says this represents a standout performance during such a poor year. The company maintained its No.-2 position in the global semiconductor market behind Intel Corp.

Qualcomm Inc. in 2009 is projected to post the next-best performance among the Top-10 suppliers, with its revenue expected to remain flat compared to 2008. Advanced Micro Devices Inc. (AMD) limite its 2009 revenue decline to 7.6% due to its strong performance in the microprocessor market which is also expected to decline by only 7.6% in 2009, the report said. This allowed AMD to climb back into the Top-10 rankings after a one-year absence, rising to the No.-9 position, up from 12th place in 2008.

Sony Corp. suffered the worst performance among the Top-10 suppliers, with its revenue set to decline by a stunning 32.8% for the year, the report said.

Regionally, the Asia/Pacific region is set to post the strongest performance both as a supplier as well as a consumer of semiconductors. Semiconductor companies with headquarters in Asia actually are expected to see their combined revenue grow by 0.3%, said the report Total shipments of semiconductors to the Asia/Pacific region are forecasted to decline by only 6.8%.

On the other hand, Europe was the hardest hit region in 2009. Shipments of semiconductors to Europe are estimated to fall by 20.8% and companies headquartered in the European region are expected to suffer a combined drop of 24.2%.

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