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© alexander fediachov dreamstime.com Components | December 17, 2012

Worldwide Semi revenue declined in 2012

Worldwide semiconductor revenue has totaled $298 billion in 2012, a 3 percent decline from 2011 revenue of $307 billion, according to preliminary results by Gartner, Inc.
The top 25 semiconductor vendors' revenue declined 4.2 percent, more than the industry average, and accounted for a smaller portion of the industry's total revenue — 68.2 percent in 2012, compared with 69.2 percent in 2011.

The industry was expected to show little growth in the early part of 2012, although order rates were expected to creep up in the second half, paving the way for a recovery phase in 2013. However, the expected renewal did not occur in 2012. Third quarter order rates were below seasonal expectations, and guidance for the fourth quarter of 2012 forecast further declines.

"Uncertainty about the state of the macroeconomy, coupled with ongoing inventory overhang, sent ripples through the semiconductor industry," said Steve Ohr, research director at Gartner. "The hardest hit areas include the PC supply chain, memory, analog and discrete components. The PC business, ordinarily a growth driver, was on a negative slope for the first time in many years. PC production declined 2.5 percent in 2012. Even the smartphone juggernaut had begun to show signs of maturing, though it remained the strongest driver for revenue growth in 2012."

Intel recorded a 2.7 percent revenue decline, mostly due to declining PC sales. However, the company did hold onto the No. 1 market share position for the 21st consecutive year, capturing 16.6 percent of the 2012 semiconductor market, its best performance ever.

At No. 2, Samsung Electronics saw its semiconductor revenue fall due to declines in its three major product areas, DRAM, NAND flash and system integrated circuit (IC). Bucking the industry trend and rising three places to No. 3, Qualcomm attributed its 29.6 percent growth to continued adoption of smartphones and the growth of 3G and LTE technology in emerging regions, such as China and India.

The only other top 10 semiconductor vendor to record positive growth in 2012 was Broadcom, which rose from the 10th to the ninth position with growth of 8.8 percent. While part of the company's year-over-year performance gain was attributed to the acquisition of NetLogic Microsystems, the highest organic growth in the company was once again achieved by the Mobile and Wireless division, which grew close to double digits. Broadcom's third division, Broadband, bounced back from a revenue decline in 2011 by growing in the mid single digits in 2012.

As a group, memory makers suffered the most. DRAM makers suffered from rapid price declines, while the NAND flash market also saw strong price declines as a consequence of sluggish bit growth. Overall, Samsung's semiconductor revenue was down 8.7 percent, and SK Hynix's was down 11.2 percent.

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