Electronics Production | August 02, 2007
Consumer Chipmakers Top 5
Riding a surge in demand for Portable Media Players (PMP)/MP3 players, Hynix Semiconductor Inc. in 2006 posted a standout performance in the global consumer-electronics chip business, according to iSuppli Corp.
Hynix of South Korea in 2006 advanced one position in iSuppli's ranking of top consumer-electronic chip suppliers, displacing Renesas Technology Corp. of Japan to take fifth place. The rise was due to Hynix's strong sales of NAND- type flash memory for PMP/MP3 products. Total PMP/MP3 unit shipments surged to 178.1 million in 2006, up 38.4 percent from 128.7 million in 2005. Hynix expanded its PMP/MP3 revenues to $831 million in 2006, up 42.9 percent from $582 million in 2005. That increase was the highest among the three key suppliers to the PMP/MP3 market: Samsung Electronics Co. Ltd. of South Korea, Japan's Toshiba Corp. and Hynix. These three companies together accounted for more than 97 percent of global PMP/MP3 NAND flash memory revenue in 2006. Market stability “Hynix's performance was particularly notable given the relative stability of the overall rankings in 2006," said Chris Crotty, senior analyst for consumer electronics at iSuppli. “The Top-10 ranked suppliers for total consumer-electronics semiconductors remained the same from 2005 to 2006, despite some shifts in positions compared to 2005." Large, vertically-integrated manufacturers continued to dominate the $53.1 billion consumer electronics semiconductor market in 2006, with Toshiba, Sony, Samsung and Matsushita retaining their first through fourth positions, respectively. Renesas of Japan fell three positions in the global ranking, declining to 8th place, down from 5th in 2005. As a whole, the Top-10 suppliers accounted for nearly 50 percent of all consumer-electronics semiconductor revenue during 2006. The table below presents the Top-5 suppliers of semiconductors to consumer electronics applications. PMP/MP3 market machinations Meanwhile, nVidia Corp. of the United States—due to its acquisition of PortalPlayer Inc.—passed fellow American firm SigmaTel Inc. to take the top spot for PMP/MP3 controller chips. nVidia's PMP/MP3 revenue reached $173 million in 2006, despite the earlier loss of the Apple iPod nano design win to Samsung. China's Actions Semiconductor Co. Ltd., which also moved past SigmaTel to take the No. 2 spot, actually shipped the most controller units by far, at 75.3 million in 2006. But just as Actions arose in 2005 and 2006 to challenge the market pioneers PortalPlayer and SigmaTel, a new wave of competitors emerged in late 2006 and early 2007 to confront Actions. These new competitors include startups such as Rockchip, Taiwanese fabless suppliers like Silicon Motion Technology Corp. and Sunplus Technology Co. Ltd., and even broad-line suppliers like Analog Devices Inc. and Texas Instruments Inc. of the United States. Challenging incumbents The fast-growing Set-Top Box (STB) segment is another market where relatively smaller and/or new competitors are trying to challenge the incumbent leaders. The stakes are high as STB unit shipments will grow 11.5 percent annually to reach 197.4 million by 2011, up from 96.6 million in 2006. Meanwhile, total STB semiconductor revenues will increase to $7.3 billion in 2011, up from $4.9 billion in 2007. Historically, Broadcom Corp. and STMicroelectronics have dominated the market for STB video processing ICs, which reached slightly more than $2 billion in 2006. The two suppliers combined for 69.6 percent and 63.8 percent market shares in 2005 and 2006, respectively. However, many of the same factors driving growth in this market—including High Definition (HD) penetration, Digital Video Recorder (DVR) deployment, MPEG-4 class decoding, regional satellite growth and Internet Protocol Television (IPTV) development—also are spurring new opportunities for other suppliers. Perennial third-place finisher, Conexant Systems Inc. of the United States, which is particularly strong in the satellite segment, achieved 96.2 percent revenue growth. U.S. microprocessor giant Intel Corp., boosted by its Zarlink acquisition, more than tripled STB-related sales in 2006. U.S.-based Sigma Design Inc., which leads the IPTV segment, nearly doubled its revenues to $54 million in 2006. DVD upstartsa Sigma Designs in 2006 also posted industry-leading growth in the DVD semiconductor market. DVD controller chip suppliers are trying to take advantage of several shifts in the market, most notably the transition from players to recorders and from current-generation red lasers to next-generation blue lasers, which are used in the HD-DVD and Blu- ray high-definition specifications. Despite the efforts of newcomers to the DVD controller chip market, established suppliers MediaTek Inc. of Taiwan, U.S.-based Zoran Corp. and Sunplus retained their Top-3 positions—although Zoran passed Sunplus to take the No.-2 spot. Given recent developments in the market—such as, Broadcom's entry to the market, Magnum Semiconductor Inc.'s acquisition of LSI Corp.'s DVD recorder business and reports of ESS Technology Inc.'s pending liquidation—the DVD controller business likely will see more significant changes during 2007. Picture perfect performance Meanwhile, Zoran saw even greater success in the Digital Still Camera (DSC) market, where it led in both market share and revenue growth for image processors during 2006. Known for its Camera-On-A-CHip (COACH) line of image processors, Zoran's DSC revenue grew to $149 million in 2006, up 39.3 percent from $107 million in 2005. The company, along with Texas Instruments and Sunplus, benefited from the continuing shift toward outsourced assembly that favors merchant Application Specific Standard Product (ASSP) and Digital Signal Processor (DSP) suppliers over proprietary ASIC solutions. In 2006, outsourced assembly accounted for more than 50 percent of DSC shipments. iSuppli Table: Top-5 Suppliers of Semiconductors to Consumer Electronics Applications in 2006 and 2005 (Ranking by Revenue in Millions of U.S. Dollars) Source: iSuppli Corp. August 2007