Equipment inventories began to build as the year progressed, with resulting ripples throughout the semiconductor industry.
Worldwide
semiconductor revenue grew 0.9 percent from 2010, reaching $302 billion in
2011, according to preliminary results by IT research firm Gartner. After a
strong start to the year, worries about the strength of the macroeconomy slowed
equipment and semiconductor orders in 2011, the report found.
Intel
held the No. 1 position for the 20th consecutive year, and 2011 marks the
company's highest-ever market share at 16.9 percent. Its previous high was in
1998 when it commanded 16.3 percent of the market. Intel saw strong growth in
the first half of the year as the PC market stocked up inventory in
anticipation of a strong second half of the year, and its server products
Westmere and Nahelem had strong years. The company's revenue for 2011 includes
the wireless business unit (BU) purchased from Infineon in the first quarter of
the year, a transaction adding about $1.4 billion to Intel's revenue in 2011.
"The
industry did well in the early part of the year, in many cases entering the
year with backlog from an exuberant 2010," said Stephan Ohr, semiconductor
research director at Gartner. "But uncertainty about the state of the
macroeconomy set in at the midpoint of the year. Consumers held off purchases,
and infrastructure expansion plans languished as governments resisted assuming
more debt. Equipment inventories began to build as the year progressed, with
resulting ripples throughout the semiconductor industry."
In
second place, Samsung Electronics saw its revenue grow slightly above the
industry average despite its exposure to the declining DRAM market. Samsung's
NAND business saw healthy revenue growth, but this was broadly in line with the
overall NAND market growth. Samsung's non-memory business was by far the
strongest growth area for the company, with application-specific devices,
particularly wireless applications processors. The strongest growth came from
Samsung's relationship with Apple, where it is supplying the A5 processor used
in the iPhone 4S and iPad 2 tablet.
The
report noted Texas Instruments, in the No. 3 position, has arguably the
strongest manufacturing capability in the analog semiconductor industry-a
consequence of acquisitions made in 2010. However, uncertainties in the
macroeconomic environment affected revenue for all analog suppliers as orders
slowed in the third quarter of 2011 and again in the fourth quarter. The
slowdown for power management devices-important in the construction of new data
centers, and in the deployment of personal computers-was not as severe as the
slowdown in amplifiers and data converters.
As
a group, the processor makers-Intel, Qualcomm, Advanced Micro Devices and
Nvidia-outperformed the rest of the industry. Intel's server business grew
despite slowdowns in PC production, Qualcomm was carried by ongoing shifts to
4G and LTE mobile services, and Nvidia's Tegra platform supported tablet makers
hoping to capture some of the enthusiasm associated with tablet PCs.
Memory
makers among the top 25 semiconductor suppliers-Hynix, Micron and Elpida-showed
revenue declines as a consequence of DRAM price declines and loss of market
share in the DRAM space. Samsung's growth of 3.7 percent growth was carried as
much by mobile phone application-specific integrated circuits (ASICs) as by
memory. SanDisk grew 33.5 percent on demand for flash memory, Gartner reported.
Nathan Eddy is Associate Editor, Midmarket, at eWEEK.com. Before joining eWEEK.com, Nate was a writer with ChannelWeb and he served as an editor at FierceMarkets. He is a graduate of the Medill School of Journalism at Northwestern University.
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