The bottom line would indicate that market conditions and semiconductor manufacturer’s revenue declines for 2009 could have been a lot worse, if the strong market recovery in the second-half of the year had not developed. Two out of the top twenty companies, according to the latest preliminary rankings by iSuppli Corp, will actually have grown sales in the year.
“The year 2009 will be remembered as one of the most dismal years in the history of the global semiconductor business, with a plunge of more than US$32 billion in revenue compared to 2008,” said Dale Ford, senior vice president at iSuppli Corp. “However, iSuppli’s preliminary estimate of a 12.4 percent decline is far better than expectations from early 2009 of a more than 20 percent plunge.
“There was little room for anything but pessimism after the industry suffered a sequential revenue decline of 21.4 percent in the fourth quarter of 2008 and an 18 percent drop in the first quarter of 2009. However, semiconductor sales rebounded smartly after that, with sequential increases of more than 18 percent in the second and third quarters and an expected 5 percent rise in the fourth quarter. This strong rebound means 2009 will be much less painful than had been feared earlier in the year.”
As can be seen in the chart below, only Samsung and MediaTek grew sales this year. A handful of companies are expected to see revenue declines remain in single figures (Intel, Toshiba, Hynix, AMD, Broadcom, Micron, and Elpida). Only Qualcomm is expected to post sales flat with 2008.
The others ranked in the iSuppli table have suffered considerably more than their peers, the worst performer is expected to be Freescale, mimicking its unkind nickname of Freefall, all to well!
On a wider-scale, only 27 of the 135 leading semiconductor suppliers tracked by iSuppli are expected to achieve revenue growth for the year.
The remarkable turnaround is best seen in the memory sector, with Samsung’s scale and market leadership in both DRAM and NAND making it even more obvious that bigger is better and technological leadership and lowest cost is king.