Report: Worldwide Semiconductor Revenue Declined $29 Billion in 2009
Dec 23, 2009
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The semiconductor industry will post a revenue decline for just the sixth time in the last 25 years, with worldwide revenue totaling US$226 billion in 2009, an 11.4% decline from 2008, according to preliminary estimates by Gartner, Inc.

However, it said that 2009 still goes on record as one of the worst years for the semiconductor industry since the burst of the dot-com bubble in 2001 — and the first year the semiconductor industry posted declines two years in a row. Worldwide semiconductor revenues declined 5.4% in 2008, a consequence of the worldwide economic recession, which began in the fourth quarter.

Some semiconductor vendors experienced the recession worse than others, the report said. Japanese semiconductor vendors, for example, were very hard hit, first by the world recession, which curtailed orders, and second by the strong Japanese yen, which made Japanese products more expensive than American and European devices.

Intel held the No. 1 position for the 18th consecutive year, despite revenue declines, and it increased its market share to 14.2% in 2009. Only three of the top 10 semiconductor vendors saw revenue growth in 2009; two of them were memory manufacturers, Samsung and Hynix, whose revenue grew primarily because of the firming of memory prices. Qualcomm grew by capturing market share among cellular baseband processors. Outside of the top 10, Taiwan's MediaTek grew 21.4%, due its strong position among Chinese cell phone makers.

Four of the seven companies in the top 10 showing revenue declines experienced double-digit declines, the report said. Infineon's precipitous 46.5% drop was a consequence of the failure of its memory business unit, Qimonda, and the sale of its wireline communications business. If one subtracts wireline component revenue from Infineon's 2008 revenue to facilitate a "like for like" comparison in 2009, Infineon's revenue drop is only 27.2%, according to the report.

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