Semiconductor revenues decline in 2012

Worldwide semiconductor revenue has declined from this time last year, according to preliminary results from Gartner.

According to Gartner, revenue was$298 billion in 2012, compared to $307 billion in 2011. The top 25 semiconductor vendors’ revenue also saw a downturn with a decline of 4.2 percent.  Those companies had 68.2 percent of total revenue in 2012, compared with 69.2 percent in 2011.

Gartner conceded that its previous expectations had not been correct.  Earlier this year it had predicted the industry would show little growth in the early part of 2012, but order rates would creep up in the second half, paving the way for a recovery phase in 2013, but this proved to be wrong.

Instead, expected renewal did not occur in 2012, while third quarter order rates were below seasonal expectations, and guidance for the fourth quarter of 2012 forecast further declined.

The company blamed this on the uncertainty about the state of the economy, coupled with ongoing inventory overhang, which it claimed “sent ripples through the semiconductor industry”.

Steve Ohr, research director at Gartner, pointed out that the hardest hit areas included the PC supply chain, memory, analog and discrete components.

Ohr pointed out that the PC business, ordinarily a growth driver, was on a negative slope for the first time in many years, while PC production declined 2.5 percent in 2012.

Intel recorded a 2.7 percent revenue decline mostly due to poor PC sales. Despite this, the company did manage to cling onto first position in market share for the 21st consecutive year, capturing 16.6 percent of the 2012 semiconductor market, its best performance ever.

Samsung, at second place, saw its semiconductor revenue fall. Gartner said this was due to declines in its three major product areas, DRAM, NAND flash and system integrated circuit (IC).

It was better news for Qualcomm however, which rose three places to third position as a result of  its 29.6 percent growth, thanks to continued adoption of smartphones and the growth of 3G and LTE technology in emerging regions, such as China and India.

The only other top 10 semiconductor vendor to record positive growth in 2012 was Broadcom, which rose from the 10th to the ninth position with growth of 8.8 percent.