While Intel and Qualcomm managed to increase their chip revenues in 2008, the rest of the world's semiconductor companies lost money this year as the financial crisis continues to have a significant impact on enterprise IT and consumer spending, according to a Dec. 12 Gartner report.
The Gartner report estimates that the worldwide semiconductor industry will collect $261.9 billion in revenue in 2008, a 4.4 percent drop from 2007 when revenue topped $273 billion. This year is only the fifth time in 25 years that the semiconductor industry has lost money, according to Gartner.
Intel, the world's largest producer of x86 processors for desktops, laptops and server systems, will collect an estimated $34.2 billion in revenues this year, an increase of about 1.1 percent from 2007. However, the Gartner estimates still include Intel's NOR memory business that the company spun off earlier this year. When looking only at Intel's ongoing operations, the chip giant's revenue grew 6.5 percent.
Of the world's top semiconductor companies, Qualcomm also managed to increase its revenue to due to demand for devices based on the company's CDMA (Code Division Multiple Access) technology. For the year, Qualcomm's revenue increased 15 percent to $6.5 billion, according to Gartner's estimates.
Since the financial crisis began in earnest in September, businesses and consumers have been cutting down on their purchases of IT gadgets and hardware, especially PC. This has had a major impact on both PC vendors - Hewlett-Packard and Dell have each issued cautious forecasts about 2009 - as well as the companies that supply the chips for these devices.
Intel has already issued a warning that its fourth-quarter sales numbers would be below expectations. Advanced Micro Devices, which did not make Gartner Top 10 semiconductor revenue list, has also issued a statement about its fourth quarter numbers.
"Unfortunately for vendors, 2009 is going to be considerably worse," Andrew Norwood, a Gartner analyst, wrote in the Dec. 12 report. "Some have compared the precipitous decline in semiconductor demand to that of the 2001 -dot-com' bubble. However, unlike 2001, this economic downturn is much more broad-based and not limited primarily to the technology sector."
While Intel retained its top spot in terms of revenue, Samsung finished second. The company's chip revenues totaled $17.9 billion but that was a 12.5 percent decrease from 2007, according to Gartner.
Toshiba watched its 2008 revenue drop 11 percent, while Texas Instruments' revenue fell nearly 17 percent year-over-year. STMicroelectronics, Infineon Technologies, Renesas Technology and Hynix Semiconductor also watched their revenues drop in the last year.
NEC Electronics, which ranked tenth on the Gartner list, saw its revenues increase about 5.3 percent for a total of $5.9 billion in 2008.