Intel, Qualcomm See Semiconductor Revenues Grow in 2011: Gartner

Intel grew its market share to record levels, thanks to its PC and server businesses, while Qualcomm leveraged its strength in smartphones, Gartner said.

Intel€™s semiconductor revenues jumped more than 20 percent in 2011 as the company put more space between it and second-place Samsung Electronics, which had been gaining traction in the industry, according to market research firm Gartner.

At the end of the year, Intel€™s market share sat at 16.5 percent, according to Gartner numbers released April 17, while Samsung€”which saw revenues grow only 1 percent€”had 8.9 percent share.

Gartner€™s figures reflect similar ones released last month by IHS iSuppli, which credited Intel€™s surge to its PC and server chip business, its flash memory unit and its $1.4 billion acquisition of Infineon Technologies€™ mobile chip business.

Gartner analyst Peter Middleton agreed that server and PC chips were key drivers of the overall growth of the semiconductor market in 2011, which saw revenue rise 1.8 percent, to $306.8 billion.

"Of the major device segments, microcomponents performed best in 2011 after a relative underperformance in 2010," Middleton said in a statement. "Within microcomponents, the subcategory that really drove this performance was compute microprocessors, which grew 14.2 percent year-over-year as a result of strong average selling prices (ASPs). This was driven both by servers and PCs, with the PC microprocessor market strongly benefiting from graphics integration.€

Intel€™s 20.7 percent revenue jump helped the giant chip maker gain its highest-ever share of the market, which the company had led for 20 straight years. Its previous highest market share was 16.3 percent in 1998, according to Gartner.

Samsung, which had been seeing strong market share growth in recent quarters, stalled a bit, due in large part to weakness in the dynamic RAM (DRAM) market last year, Gartner analysts said. In third and fourth places, respectively, were Toshiba and Texas Instruments.

Qualcomm, due to the fast-growing smartphone space, jumped from ninth to sixth place, according to Gartner. Qualcomm saw its revenues increase by 38.8 percent, becoming one of the fastest-growing companies in the space.

Combined revenue for the top 25 semiconductor companies jumped 3.1 percent, faster than the overall market, and the combined market share rose from 68.3 percent in 2010 to 69.2 percent last year. However, the analysts said that about half of that growth came from mergers and acquisitions.

Intel in early 2011 launched its Sandy Bridge processors, which included integrated graphics capabilities, and quickly expanded the micro-architecture throughout much of its chip portfolio. While the traditional PC and server spaces continue to be lucrative businesses for Intel, the giant chip maker this year is looking to finally make inroads into the mobile computing space€”particularly in smartphones and tablets€”which is dominated by chips designed by ARM Holdings and manufactured by Samsung, Qualcomm, Texas Instruments and others. The first smartphone powered by Intel€™s Atom Z2460 Medfield chip is due out April 23 in India.

Intel also is looking to leverage the improved performance, graphics and power efficiency of its upcoming €œIvy Bridge€ processors to drive the adoption of Ultrabooks, very thin and light notebooks that combine the productivity capabilities of traditional laptops with features found in tablets, such as long battery life and touch-screens.

During a conference call with analysts and journalists April 17, Intel CEO Paul Otellini noted that there already are 21 Ultrabooks on the market now, powered by Sandy Bridge chips, and more than 100 designs in the pipeline that will start hitting store shelves this quarter.