'Strong' semiconductor suppliers shine in slow market

According to data from IC Insights, eight of the top 20 companies had double-digit Q1-Q3 year-over-year growth rates.

By Suzanne Deffree, Managing Editor, News -- Electronic News, 11/7/2008

While most of the semiconductor industry companies in IC Insights Inc's Q3 top 20 supplier ranking shifted one or two spots, the research company made point of two star performers and three not-so stellar performers in its quarterly report.

On the positive side, IC Insights reported that cell phone IC supplier Qualcomm used a 27% year-over-year growth rate to jump five spots and rank as the ninth largest semiconductor supplier through the first three quarters of 2008 with more than $5.1 billion in 2008 sales at the end of the September quarter.

IC Insights also reported that the third largest fabless supplier, Broadcom, jumped five positions and is now positioned as the 18th largest semiconductor supplier in the world with more than $3.4 billion in 2008 sales through the September quarter.

On the negative side, IC Insights pointed out that with a 5% year-over-year decline in Q1-Q3 sales of nearly $4.2 billion, NXP fell five spots to 15th from 10th in 2007. For all of 2008, the company’s sales are forecast to decline 11% as compared to 2007, IC Insights said.

The research company also reported that DRAM-supplier Qimonda’s "nightmare" worsened in Q3, as the company dropped 12 positions from being ranked 18th overall in 2007 to 30th in the first three quarters of 2008. Qimonda, like many memory industry players, is feeling the brunt of oversupply and weak ASPs (average selling prices) and in October announced it would slash 3,000 jobs and exit 200-mm production.  Memory maker Hynix also showed a year-over-year decline, down 27% Q1-Q3 2008 compared to the same period in 2007, according to the research company's data.

"With some major DRAM and flash suppliers (eg, Qimonda, Elpida, and Spansion) no longer part of the top 20 ranking, the total Q1-Q3 2008/Q1-Q3 2007 sales of the top 20 semiconductor suppliers displayed a relatively strong 6% increase as compared to the total worldwide semiconductor market increase of 4%," Bill McClean, president of IC Insights, said in a statement. 

According to the research company's data, eight of the top 20 companies had double-digit Q1-Q3 year-over-year growth rates.  Further, all of these companies registered growth rates that were more than three times the 4% growth rate of the entire Q1-Q3 semiconductor market. "It goes to show that there are still 'strong' performers in a 'slow' market," McClean said.

IC Insights total top 20 ranking is made up of eight US companies, six Japanese companies, three European companies, two South Korean companies, and one Taiwanese company. All companies in the ranking showed at least $3 billion in Q1-Q3 sales. Intel, Samsung, TI, and Toshiba maintained the top four spots in the ranking.

IC Insights noted the current state of the worldwide economy and the "weakening semiconductor markets" and projected the top 20 semiconductor suppliers, in total, will register Q4 sales of $43.2 billion, a decline of 8% sequentially. 

"It should be noted that the 'star' growth company in the first three quarters of 2008, Qualcomm, has warned that its calendar year Q4/Q3 sales are expected to drop about 28%! However, its current full-year 2009 WCDMA/CDMA cellular phone device shipment forecast is +25%, essentially the same growth expected for 2008," McClean said.  

For full-year 2008, IC Insights estimated the top 20 semiconductor suppliers will have combined sales of $182.2 billion, a 2% increase over 2007.