Global semiconductor revenues fell 3 per cent in 2012

The global semiconductor revenues fell 3 per cent to $298 billion in 2012 from $307 billion last year, while the top 25 semiconductor vendors' revenue declined 4.2 per cent during the year.

The top 25 semiconductor vendors' revenue decline was more than the industry average, but accounted for a smaller portion of the industry's total revenue of 68.2 per cent in 2012, according to a preliminary report by technology market researcher, Gartner.

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 in 2013. However, the expected orders did not materialise 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 macro economy, coupled with ongoing inventory overhang, sent ripples through the semiconductor industry. The hardest hit areas include the PC supply chain, memory, analogue and discrete components. The PC business, ordinarily a growth driver, was on a negative slope for the first time in many years. The personal computer production fell 2.5 per cent in 2012. Even the smartphone juggernaut had begun to show signs of maturing, though it remained the strongest driver for revenue growth in 2012,'' Steve Ohr, research director at Gartner, said in a statement.

Intel recorded a 2.7 per cent revenue decline, mostly due to decline in personal computer sales. However, the company did hold on to its number one market share position for the 21st consecutive year, capturing 16.6 per cent of the 2012 semiconductor market, its best performance ever.

At number two, Samsung Electronics saw its semiconductor revenues fall due to declines in its three major product areas, DRAM, NAND flash and system integrated circuit.

Bucking the industry trend and rising three places to number three, Qualcomm attributed its 29.6 per cent 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 tenth to the ninth position with growth of 8.8 per cent.

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. Dynamic random access memory (DRAM) manufacturers 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 perc ent, and SK Hynix's was down 11.2 per cent.

Table 1. Top 10 Semiconductor Vendors by Revenue, Worldwide, 2012 (Millions of Dollars)