The worldwide semiconductor market showed signs of recovery in 2016 following a down year in 2015, according to IHS Markit. In 2016, the market posted a year-end growth rate of 2% with chip growth seen across multiple market segments. Global revenues came in at US$352.4 billion, up from US$345.6 billion in 2015.

Key drivers of this growth were DRAM and NAND flash memory, which grew more than 30% collectively in the second half of 2016, said IHS. Key to this turnaround was supply constraints and strong demand, coupled with an ASP increase. These factors are expected to drive memory revenues into record territory throughout 2017, IHS indicated.

Semiconductors used for automotive applications were also a key driver of 2016 growth, with a 9.7% expansion by year-end. Chip content in cars continues to climb, with micro components and memory ICs leading the pack, both experiencing over 10% growth in automotive applications.

"The strong component demand that drove record capital expenditures in 2016 also provided the industry with advanced technology platforms which will support further semiconductor revenue growth in 2017," said Len Jelinek, senior director and chief analyst for semiconductor manufacturing at IHS.

Continuing a recent trend, the semiconductor market saw another year of intense consolidation with no signs of slowing down, IHS said. The year began with the close of the biggest-ever acquisition in the semiconductor industry. Avago Technologies finalized its US$37 billion acquisition of Broadcom to form Broadcom Limited, which jumped to rank fourth in terms of market share (Avago previously ranked 11th). This acquisition resulted in the newly formed company increasing its market share in several market segments, including taking a large lead in the wired application market.

"After some selective divestiture, Broadcom Limited has focused on market segments where its customer base holds dominant market share positions. These also tend to be markets which have fairly stable and visible TAM growth," said senior analyst Brad Shaffer. "These characteristics may help entrench the company's market share positions in areas where it chooses to compete," added Shaffer.

Among the top 20 semiconductor suppliers, ON Semiconductor and Nvidia enjoyed the largest revenue growth, followed closely by MediaTek, IHS said. ON and MediaTek achieved growth through multiple acquisitions, while Nvidia saw an enormous demand for its GPU technology as it moves into new markets and applications.

Qualcomm remained the top fabless company in 2016 while MediaTek and Nvidia moved into the number two and three spots, respectively, IHS said. The fabless company with the largest market share gain was Cirrus Logic, a major supplier for Apple and Samsung mobile phones.

Intel remained in the number one spot for semiconductor suppliers in 2016, followed by Samsung, IHS noted. Qualcomm came in at number three, with plans to increase its market share in 2017 with its pending acquisition of NXP.