Worldwide chip revenues are set to post a 11.4% decline in 2009, following 2008 when the revenues dropped 5.4%, according to Gartner. The research firm commented that 2009 will mark the first year the semiconductor industry experienced declines two years in a row.
Memory revenues declined in 2009, but by significantly less than the entire semiconductor industry, Gartner said. After seeing revenue declines in 2007 and 2008, the memory segment was due to see a recovery.
Gartner noted that memory vendors had slashed capital spending in the previous years, and supply constraints effectively elevated pricing. NAND flash moved into an undersupply condition at the start of 2009; DRAM followed late in the second quarter of 2009, sending prices soaring.
The bankruptcy of Qimonda and near collapse of some of the weaker Taiwan-based players meant that most of the major DRAM vendors were able to pick up market share at the expense of these companies and even report revenue growth, Gartner indicated. Both Samsung Electronics and Hynix Semiconductor would see their revenue growth outperform the remaining of the top 10 semiconductor vendors in 2009, thanks to the long-awaited firming of memory prices, according to Gartner.
Apart from Samsung and Hynix, Qualcomm would grow slightly by capturing market share among cellular baseband processors, said Gartner. Overall, only three of the top 10 chip vendors would manage revenue growth in 2009.
Outside of the top 10, but within the top 25, Taiwan's MediaTek grew 21.4% because of its strong position among off-brand Chinese cell phone makers, Gartner said. It was the only company within the top 25 to show double-digit growth.
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, Gartner indicated. If one subtracts wireline component revenues from Infineon's 2008 revenues to facilitate a "like for like" comparison in 2009, Infineon's revenue drop is only 27.2%.
Intel continues to hold the No. 1 position for the 18th consecutive year, despite revenue declines, according to Gartner.
"With the market emerging from recession, semiconductor vendors need to track the end users' spending patterns through 2010 in order to detect any disruptions in demand ― or additional demands that outstrip capacity," said Stephan Ohr, semiconductor research director at Gartner. "Neither the recession nor its recovery was felt equally by all semiconductor vendors. The PC segment was the first to spring back, followed later in the year by other segments reflecting consumer sentiment, like cell phones and automobiles. Enterprise spending was most deeply impacted by the recession and remains slow to recover."
Some semiconductor vendors experienced the recession worse than others, Gartner observed. Japan-based players, 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.