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Top IC firms less bright in 2008

Posted: 16 Mar 2009 ?? ?Print Version ?Bookmark and Share

Keywords:top IC companies? underperforming semiconductor? industry chip?

Almost all of the semiconductor industry's top 25 companies not only reported sales declines last year!they also underperformed the overall chip industry for the year, according to researchers at iSuppli Corp.

"Many of these suppliers are focused on semiconductor segments that performed poorly during the year, including memory, Digital Signal Processors (DSPs), analog ICs and standard logic. This caused 80 percent of the Top 10 and 60 percent of the Top 25 semiconductor suppliers to experience declining revenues compared to 2007," said Dale Ford, senior VP at the market research group.

iSuppli said total IC sales declined 5.2 percent in 2008 to $258.3 billion, from $272.6 billion the previous year.

Of the leading 25 companies by revenue, those that managed to expand sales were STMicroelectronics (5th place) , Qualcomm Inc. (8), NEC Electronics Corp. (11), Broadcom Corp. (14), Panasonic Corp. (15), Sharp Electronics Corp. (18), Rohm (20), Marvell Technology Group Ltd (22), MediaTek Inc. (23) and ranked Fujitsu Microelectronics Ltd (24).

However, Ford suggests that even amongst the top ten, growth in 2008 was not necessarily all it was cracked up to be!with only six increasing their sales organically.

"The growth achieved by STMicroelectronics, Rohm and MediaTek in 2008 was enabled or enhanced by major acquisitions during the year, rather than by increasing sales in their existing product lines," said Ford.

The remaining six!Qualcomm, NEC, Panasonic, Sharp, Marvell and Fujitsu!expanded their revenues by between 1.5 percent and 15.3 percent in 2008 based only on organic growth.

However, for the four Japanese suppliers, NEC, Panasonic, Sharp and Fujitsu Microelectronics, this growth was less about rising sales and more about a significantly more favorable exchange rate between the Japanese yen and the U.S. dollar.

Poor results
Six of the Top-10 suppliers underperformed the overall semiconductor industry last year; second placed Samsung Electronics Co. Ltd, third rated Toshiba Corp., No.4 Texas Instruments Inc., No.6 Renesas Technology, No.7 Sony Corp. and No.9 Hynix Semiconductor Inc.

Hynix posted the largest revenue decline of all, down 33.4 percent. This was followed by NXP Semiconductors, at 29.4 percent, mainly due to the spin off of its wireless chip business. The next biggest decliners were Samsung, Sony and Renesas.

iSuppli has admitted that its final estimate of a 5.2 percent decline in 2008 semiconductor revenue represented a significant widening from the 2 percent decrease it projected in November.

"In our November estimate, fourth-quarter semiconductor revenue was projected to decline by 8.8 percent compared to the third quarter based on guidance provided by semiconductor suppliers in reporting their quarterly financial results," said Ford.

"However, the final results show that the market experienced a significant and broad-based decline of 21.5 percent in the fourth quarter. While memory IC revenues struggled with negative growth for an extended period, the market decline in the fourth quarter impacted every semiconductor segment!without exception."

On the better news front, Qualcomm moved into eighth spot last year, up from 13th in 2007. Another fabless supplier, Broadcom jumped to No.14, up from 19th position the previous year. Rohm and MediaTek also moved up to the 20th and 23rd rankings respectively.

Fabless suppliers as a group achieved revenue growth of 1.4 percent in 2008. Qualcomm, Broadcom, Marvell Technology and MediaTek each grew their revenues in a range between 10.2 percent and 23.9 percent in 2008. Out of the five fabless companies in the Top-25 rankings, only Nvidia saw its revenues decline last year.

Top 25 semiconductor suppliers for 2008 (Click on image to enlarge.)

Optical components, standard linear ICs, programmable logic devices, microprocessors and sensors/actuators were the only major semiconductor market segments to achieve growth, with their revenues increasing between 1 and 6 percent. Wired communications and industrial electronics were the only end-market segments to see increased revenues for 2008 with growth between 2 and 3 percent for the full year.

- John Walko
EE Times Europe

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