Intel, TI Lead China Chip Market
Staff Reporter -- EDN, July 11, 2006
Amid what the firm called a "dramatic slowdown" in the growth of China's semiconductor demand in 2005, STMicroelectronics and Samsung Electronics Co. Ltd. increased their chip market share in the country for the year, according to a new top-10 ranking from iSuppli Corp.
Europe's STMicroelectronics moved into the third position in China's chip market in 2005, up from fourth place in 2004, with its semiconductor revenue in the nation increasing to $1.8 billion, up 21 percent from the previous year.
"STMicroelectronics' strong performance was due to its successful restructuring, as well as its gains in emerging product areas in China, such as digital set-top boxes," iSuppli noted in a statement. The company also benefited from the relatively weak performance of fellow European supplier Philips Semiconductors, iSuppli said.
South Korea's Samsung also advanced in the rankings in 2005, rising to fourth place, up from fifth in 2004. Samsung's Chinese semiconductor revenues increased to $1.7 billion in 2005, up 28 percent from 2004—the largest percentage increase among the top-10 suppliers for the year. Samsung's rise was due to its growing memory business and its expanding market share in microcontrollers, iSuppli said.
U.S.-based chip giant Intel Corp. kept its crown, retaining the top spot in China's semiconductor market due to its leading position in PC microprocessors, the firm said. Second-place Texas Instruments Inc. recorded higher growth in the digital signal processing (DSP), analog and logic markets, owing to its large and well-established customer base that includes major OEMS like Nokia and Huawei, iSuppli added.
Philips Semiconductors dropped to the fifth position in 2005, down from third in 2004, while Japan's Toshiba Corp. posted mild growth and maintained its sixth ranking.
"It appears that Philips' past strengths in selling analog parts for CRT-based monitors and televisions have become a liability as those markets have transitioned to LCD technology," iSuppli said.
Additionally, China's overall semiconductor demand reached $37 billion in 2005, up approximately 12.8 percent from 2004, according to iSuppli.
In contrast, the firm noted China's semiconductor demand had increased by 34.9 percent in 2004, indicating a drastic slowing of growth in 2005. China's semiconductor demand has enjoyed a brisk annual growth rate for about two decades, the firm said, and so the slowing of growth is to be expected as the demand base expands.
Declining growth rates in China have been a significant trend among the major semiconductor suppliers in recent years, the firm said. However, a large number of small and mid-sized chip suppliers—such as MediaTek, Trident, MStar and Actions—reported greater than 40 percent growth in China during 2005. These companies are becoming major drivers of fresh growth in the industry, iSuppli said, and the firm expects their momentum to continue in 2006.
China's semiconductor demand was strong in Q1, but in Q2, iSuppli said, some inventory accumulated in the mobile-phone supply chain and for consumer-electronics goods such as DVD players and Digital STBs, which were mainly for export.
The Reduction of Hazardous Substances (RoHS) product certification process in Europe, effective as of July, has also started to impact Chinese-made electronic goods for export, iSuppli said. Meanwhile, the firm added, Chinese telecom carriers are reluctant to increase capital spending because the government has continued to delay the authorization of 3G licenses.
iSuppli projects that China's semiconductor demand will increase by about 18 percent in 2006. "While this represents slowing growth compared to years past, it is still a robust figure," the firm asserted.
CHINA'S TOP-TEN SEMICONDUCTOR SUPPLIERS IN 2005
(ranking by revenue in millions of U.S. dollars)
|
2004 Rankings |
2005 Rankings |
Supplier |
2005 Revenue |
2004/2005 Change |
1 |
1 |
Intel |
5,774 |
14% |
2 |
2 |
Texas Instruments |
2,270 |
23% |
4 |
3 |
STMicroelectronics |
1,799 |
21% |
5 |
4 |
Samsung Electronics |
1,741 |
28% |
3 |
5 |
Philips Semiconductors |
1,720 |
7% |
6 |
6 |
Toshiba |
1,435 |
7% |
7 |
7 |
Hynix |
1,243 |
-6% |
9 |
8 |
Freescale Semiconductor |
1,239 |
13% |
8 |
9 |
Infineon Technologies |
1,000 |
-11% |
10 |
10 |
Micron Technology |
704 |
5% |
SOURCE: ISUPPLI CORP. JULY 2006
