Intel the Big Winner as Semiconductor Sales Grow in 2011: IDC

Revenues in the market increased 3.7 percent despite global economic issues, the tsunami in Japan and the flooding in Thailand, IDC says.

The worldwide semiconductor market, driven by demand for such devices as smartphones, tablets, PCs, e-readers and servers, grew more than 3.7 percent in 2011, and could see revenue increase of 6 to 7 percent in 2012, according to market research firm IDC.

Revenues in the semiconductor space grew to $301 billion despite a rash of challenges€”from economic issues in the United States and Europe to the earthquake and tsunami in Japan to the flooding in Thailand€”thanks to rising demand for greater intelligence in computing devices, including everything from notebooks to automatic infotainment consoles.

"There is a trend underway toward more integration, as companies try to position themselves for the next phase of growth and as device applications become more and more intelligent and move toward supporting high-level operating systems, connectivity, and application processing capabilities,€ Mali Venkatesan, research manager for semiconductors at IDC, said in a statement. €œIn addition, as large companies with strong cash balances vie for competitive positions, mergers and acquisitions will be a key theme.€

Intel continued to rule the market, with revenues of $51.8 billion during 2011. The giant chip maker not only grew its revenues over 2010, but also saw its market share grow by 3 percentage points, according to IDC analysts. Samsung was the second largest semiconductor supplier, with 2011 revenues of $29 billion, followed by Texas Instruments, Toshiba and Renesas Electronics.

IDC€™s findings echo those of market research firms Gartner and IHS iSuppi, which said that Intel was able to leverage is traditional PC and server chip business, as well as its flash memory unit. It also benefitted from its $1.4 billion acquisition last year of Infineon Technologies€™ mobile chip business.

Intel executives this year also are looking to expand the company€™s presence in the mobile device space, where most smartphones and tablets are powered by chips designed by ARM Holdings and manufactured by companies like Qualcomm, Samsung, Texas Instruments and Nvidia. The first smartphone with Intel inside€”the XOLO X900 from Lava International, powered by Intel€™s Atom Z2460 €œMedfield€ chip, launched in India April 23€”is the initial step into making Intel a key player in the smartphone space, according to Intel officials.

The company also is looking to its new €œIvy Bridge€ platform not only to help fuel sales of Ultrabooks€”very small and light notebooks championed by Intel€”but also to make its way into tablets.

According to IDC, there were several semiconductor companies that saw significant growth in 2011. Apple saw semiconductor revenues jump 140 percent over 2010, while Qualcomm, ON Semiconductor and Renesas all saw strong revenue increase. Smaller vendors, such as Spredtrum Communications, CoreLogic, Microsemi, Sequans and Icera, also grew, thanks to demand in the wired and wireless communications, consumer, automotive, and industrial market segments, the analysts said.

Sales of microprocessors grew, thanks to high demand and increasing average selling prices (ASPs) for Intel chips. NAND flash memory revenues also grew, though DRAM revenues fell 25 percent because of a huge supply and falling ASPs.

IDC€™s Venkatesan also said that €œas large companies with strong cash balances vie for competitive positions, mergers and acquisitions will be a key theme.€ IDC pointed to several acquisitions€”including Qualcomm buying Atheros and Texas Instruments purchasing National Semiconductor€”as among the key ones that saw benefits in 2011.