Semi revenue grew less than 4% in 2007 on weak memory market, iSuppli reports
The market research company put blame for the global semiconductor market’s 3.3% revenue growth squarely on the memory market, as DRAM and NAND crashed in Q4.
By Suzanne Deffree, Managing Editor, News -- EDN, March 19, 2008
The global semiconductor market saw revenue growth of only 3.3% in 2007, according to final data released from iSuppli Corp today.
The market research company put blame squarely on the memory market, reporting that worldwide DRAM revenue fell by 19.1% and NAND flash revenue declined by 3.9% quarter-over-quarter for Q4.
ISuppli has previously forecasted a 4.7% DRAM decline and a 3% increase for NAND, and total chip market revenue growth of 4.1%.
Total memory chip revenue in Q4 declined by 11% sequentially, down from iSuppli’s prediction of 1.2% growth in overall memory chip revenue. The research company suggested that the quarter’s poor memory performance was not only below its expectations, but below industry expectations, as it based its estimate in part on Q4 revenue guidances presented by semiconductor suppliers to the investment community in October and November.
“This was a complete role reversal for memory semiconductors compared to 2006,” said Dale Ford, senior VP of market intelligence for iSuppli, in a statement. “During the second half of 2006, memory IC revenues helped to prop up the growth of the overall semiconductor industry. In 2007, the poor results for memory chips restrained overall market growth. If memory were excluded from the revenue total, the semiconductor market would have grown by 2.4% in the fourth quarter. However, due to the influence of the weak memory market, total semiconductor market revenues fell by 0.5% in the fourth quarter.”
ISuppli earlier this month warned that it will lower its total 2008 growth forecast from 7.5% on market weakness, but has yet to do so.
Memory suppliers hope to soon forget 2007
The weak market conditions had a major impact on most memory suppliers in 2007, iSuppli reported, noting that Nanya Technology and Qimonda saw their memory IC revenues fall by 32.4% and 26%, respectively, for the year. The world’s leading supplier of memory chips, Samsung Electronics, experienced a decline of 3.3% in its memory semiconductor revenue in 2007, which contributed to a 0.8% decline in total chip revenue for the year.
However, Hynix Semiconductor, Toshiba, and Elpida Memory managed to achieve memory-chip revenue growth of 15, 14.5, and 8.8%, respectively, in 2007.
Outside of the memory segment
Looking outside the memory segment, iSuppli’s tone on the year was much cheerier, with the research company reporting that “several companies and product categories posted impressive performances.”
Infineon Technologies, for example, in 2007 jumped to the world’s no.-nine ranking among global semiconductor suppliers, up from 15th in 2006. During 2007, Infineon acquired Texas Instruments’ DSL customer premise equipment (CPE) chip business and its wireless baseband semiconductor unit, boosting its revenue. Infineon, which had fallen out of iSuppli’s top-10 ranking in 2006 after it split out its memory unit to form Qimonda, returned to the top-10 with a revenue rise of 21.1% compared to 2006 due a combination of organic expansion and new revenues from its acquisitions.
Sony also achieved noteworthy growth of 55.5% in 2007, propelling it to eighth place in the rankings, up from 14th in 2006, according to iSuppli’s data. The key factor behind this growth was demand for chips for Sony’s own PlayStation 3 (PS3) video-game console.
ISuppli further made note of Toshiba position as a chip supplier for the PS3. The Tokyo-based semiconductor supplier recorded the third-highest revenue growth among the top-10 suppliers in 2007 with an increase of 20.2% from 2006, positioning the company to vie with Texas Instruments for the world’s no.-three rank in 2008, iSuppli said.
ISuppli data showed that, with the exception of Sony, it was two US fabless semiconductor supplier -- Qualcomm and Nvidia -- that led the growth among the top-25 chip companies during 2007. Qualcomm’s revenues grew by 24.1% as it moved up three positions in the rankings to reach 13th place, marking the first time a position in the top-10 is within reach of a fabless semiconductor supplier, iSuppli said. Nvidia achieved revenue growth of 34.4% and leaped from no. 25 to no. 20 in the rankings, in part on a revenue boost from its acquisition of PortalPlayer last year.
ISuppli reported that the top-25 semiconductor suppliers as a group achieved revenue growth of 4.5% in 2007, while the combined growth of all other semiconductor suppliers was only 0.8%
| 2006 Rank | 2007 Rank | Company Name | 2006 Revenue | 2007 Revenue | Percent Change | Percent of Total | Cumulative Percentage |
| 1 | 1 | Intel | 31,542 | 33,995 | 7.8% | 12.6% | 12.6% |
| 2 | 2 | Samsung Electronics | 19,842 | 19,691 | -0.8% | 7.3% | 20.0% |
| 3 | 3 | Texas Instruments | 12,600 | 12,275 | -2.6% | 4.6% | 24.5% |
| 4 | 4 | Toshiba | 10,141 | 12,186 | 20.2% | 4.5% | 29.1% |
| 5 | 5 | STMicroelectronics | 9,854 | 10,000 | 1.5% | 3.7% | 32.8% |
| 7 | 6 | Hynix | 7,865 | 9,047 | 15.0% | 3.4% | 36.1% |
| 6 | 7 | Renesas Technology | 7,900 | 8,001 | 1.3% | 3.0% | 39.1% |
| 14 | 8 | Sony | 5,129 | 7,974 | 55.5% | 3.0% | 42.1% |
| 15 | 9 | Infineon Technologies | 5,119 | 6,201 | 21.1% | 2.3% | 44.4% |
| 8 | 10 | Advanced Micro Devices (AMD) | 7,506 | 5,918 | -21.2% | 2.2% | 46.6% |
| 9 | 11 | NXP | 5,707 | 5,746 | 0.7% | 2.1% | 48.7% |
| 11 | 12 | NEC Electronics | 5,601 | 5,742 | 2.5% | 2.1% | 50.9% |
| 16 | 13 | Qualcomm | 4,529 | 5,619 | 24.1% | 2.1% | 53.0% |
| 10 | 14 | Freescale Semiconductor | 5,616 | 5,264 | -6.3% | 2.0% | 54.9% |
| 13 | 15 | Micron Technology | 5,247 | 4,869 | -7.2% | 1.8% | 56.7% |
| 12 | 16 | Qimonda | 5,413 | 4,005 | -26.0% | 1.5% | 58.2% |
| 19 | 17 | Elpida Memory | 3,527 | 3,838 | 8.8% | 1.4% | 59.6% |
| 17 | 18 | Matsushita Electric | 4,022 | 3,800 | -5.5% | 1.4% | 61.1% |
| 18 | 19 | Broadcom | 3,668 | 3,746 | 2.1% | 1.4% | 62.4% |
| 25 | 20 | nVidia | 2,578 | 3,466 | 34.4% | 1.3% | 63.7% |
| 20 | 21 | Sharp Electronics | 3,341 | 3,401 | 1.8% | 1.3% | 65.0% |
| 21 | 22 | IBM Microelectronics | 3,172 | 2,977 | -6.1% | 1.1% | 66.1% |
| 26 | 23 | Marvell Technology Group | 2,550 | 2,777 | 8.9% | 1.0% | 67.1% |
| 23 | 24 | Analog Devices | 2,603 | 2,707 | 4.0% | 1.0% | 68.1% |
| 22 | 25 | Rohm | 2,882 | 2,633 | -8.6% | 1.0% | 69.1% |
| Other Companies: | 82,401 | 83,027 | 0.8% | 30.9% | 100.0% | ||
| Total Revenue: | 260,355 | 268,905 | 3.3% | 100.0% |
