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Poor 4Q12 IC market to pick up this year

Posted: 12 Apr 2013 ?? ?Print Version ?Bookmark and Share

Keywords:semiconductor revenue? CMOS? ASICs? LED?

According to IHS, despite stronger-than-expected growth in 4Q12, it was still a miserable year for the semiconductor market and suppliers. Only eight out of the Top 25 chipmakers registered revenue growthbut nine suffered double-digit declines, added the market research firm.

Global semiconductor revenue in 2012 fell by 2.2 per cent from 2011. The preliminary forecast issued by IHS in December projected a drop of 2.3 per cent. The modest improvement in the final results came from YoY growth in Q4 that came in slightly better than estimated, topping out at a 2.8 per cent increase. The preliminary estimate had predicted a 1.9 per cent expansion.

"The last three months were the only quarter in 2012 that generated a YoY increase in semiconductor market revenue, but that growth was too little and too late to salvage a terrible year for chipmakers," said Dale Ford, senior director at IHS. "Even so, the stronger performance in Q4 represents a positive signal for the semiconductor market, marking the beginning of a new growth cycle in the industry that will be sustained though 2013. IHS predicts global semiconductor revenue will rise by 5.6 per cent in 2013, bringing an end to the slump of 2012."

Semiconductor industry growth in 2012 slipped from stagnation in H1 to a slump in H2, widely affecting various players in the market. Among the Top 25 suppliers, the only companies to expand revenue in 2012 were No. 2 Samsung, No. 3 Qualcomm, No. 9 Broadcom, No. 11 Sony, No. 14 NXP, No.15 Nvidia, No.18 MediaTek and No. 24 LSI.

The remaining 17 suppliers suffered revenue declines. Companies whose revenue fell by double-digit percentages were No. 4 Texas Instruments, No. 5 Toshiba, No. 6 Renesas, No. 8 STMicroelectronics, No. 12 Advanced Micro Devices, No. 16 Freescale, No. 17 Elpida, No. 21 Panasonic and No. 22 On Semiconductor.

With semiconductor suppliers' financial condition so weak, merger and acquisition (M&A) activity among the top companies was nearly non-existent in 2012a stark contrast to the high level of activity seen in 2011.

The only major purchase was Samsung's acquisition of a 100 per cent share of the Samsung LED business from Samsung Electro-Mechanics. The results of all other top companies were not meaningfully impacted by M&A activity. While there was plenty of bad news in the 2012 semiconductor market, the most dramatic change for any single semiconductor supplier was actually a positive development: Qualcomm's nearly 30 per cent surge in revenue.

Qualcomm's revenue growth of 29.2 per cent launched it to the No. 3 rank in the global semiconductor market in 2012, up from No. 6 in 2011. Its share of the semiconductor market grew by a full percentage point to 4.3 per cent, up from 3.3 per cent.

"In two years, Qualcomm has risen from No. 9 to No. 3 in the semiconductor rankings," Ford noted. "This is the strongest ascension through the top ranks by any semiconductor company in recent history. Qualcomm continues to capitalise on the robust growth of semiconductor sales to the strong market for wireless devices including smartphones and media tablets."

Only two other companies among the Top 25 achieved double-digit growth: LSI, with 22.6 per cent; and Sony, with 21.8 per cent. These expansions were notable achievements in such a tough market environment.

The bright spots in an otherwise dismal year for semiconductor growth were found in CMOS image sensors, logic ASICs, LEDs, display drivers and sensors. Growth in CMOS image sensors hit 38.8 per cent, followed by logic ASICs at 19.0 per cent. LEDs also expanded in the double digits at 11.9 per cent. Meanwhile, growth came in at 6.9 per cent for display drivers and at 6.1 per cent for sensors and actuators.

The only other categories to sustain increases were logic ASSPs and standard logic components.

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