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Semiconductor market disappoints in 2007

by Scott Bicheno on 25 March 2008, 12:18

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Semi slump

Market researcher iSuppli has reported that the semiconductor market grew by less than it predicted in 2007.

Last November, iSuppli projected global chip market growth of 4.1 percent. Final market share data, however, reveals that poor Q4 results in the memory chip market held down overall growth to 3.3 percent.

Global DRAM revenue in Q4 was 19 percent less than in Q3, while NAND flash revenue fell by nearly four percent. Overall memory chip revenues were down by 11 percent.

“This was a complete role reversal for memory semiconductors,” said Dale Ford, iSuppli’s senior vice president for market intelligence. “During the second half of 2006, memory IC revenues helped to prop up the growth of the overall semiconductor industry. In 2007, the poor results for memory chips restrained overall market growth.”



Weakness in their core memory IC market severely affected Qimonda, the memory unit spun off by Germany’s Infineon in 2006, and Qimonda’s smaller joint venture partner Nanya Technology. Samsung, the leading supplier of memory chips, also took a hit.

Survival of the fittest was at work, however. Hynix, Toshiba and Elpida bucked the trend to register healthy growth in memory chip revenues. Toshiba posted strong results in the NAND flash memory market while other suppliers faltered.

Having dropped out of the top ten last year after the Qimonda spin-off, Infineon bounced back to ninth place, in part thanks to the acquisition of Texas Instruments’ DSL Customer Premise Equipment chip business, and its wireless baseband semiconductor unit.

Sony’s extraordinary semiconductor revenue growth was due to massive in-house demand for PlayStation 3 video game console chips. Toshiba also benefited from supplying PS3 chips.

After Sony, the strong performance of US fabless suppliers Qualcomm and NVIDIA represents a trend worth watching. Qualcomm made notable gains in the analog IC market. NVIDIA benefited from strong demand in the logic application specific integrated circuits market, and from the acquisition of PortalPlayer during 2007.

Although microprocessor revenues only grew by two percent, Intel sharply increased its market share at the expense of AMD.

Other product categories to register healthy growth in 2007 were sensors and actuators, and optical semiconductors, both of which grew by over seven percent. Even discrete semiconductors saw growth of over four percent.

Automotive applications provided the highest growth opportunities in 2007, and Asia/Pacific, as usual, accounted for the highest regional growth.



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