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 Worldwide Semiconductor Revenue Increased 4 Percent in 2007, According to Final Results by Gartner
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Message Text: Intel Increases its lead over Samsung, Toshiba jumps into third place and Hynix outperforms a declining DRAM market, Gartner says.

Worldwide semiconductor revenue totaled $273.9 billion in 2007, a 3.8 percent increase from 2006, according to final results from Gartner, Inc. Vendor performances were mixed with three vendors in the top 10 that experienced double-digit growth and four vendors that showed declines in revenue.

"With fears of recession high, semiconductor vendors need to move beyond tracking the performance of their end customers and markets, and track end users' spending patterns to pick up early warning signs of slowing demand or increased opportunities," said Richard Gordon, managing vice president at Gartner. "Periods of uncertainty, like the current one, often create ideal situations to strengthen product and application portfolios without paying inflated prices."

Intel grew revenue more than twice as fast as the semiconductor market average, with growth primarily coming from strong shipments of microprocessors for mobile PCs. Toshiba?s revenue increased 20.8 percent in 2007 to $11,820 million, gaining three places in the rankings and moving into third place (see Table 1). The strong gains mainly came from consumer application-specific integrated circuits (ASICs) for Sony's PlayStation3 (PS3) video game console, NAND flash and CMOS image sensors for mobile phones. The company saw continued growth in DRAM.

In terms of absolute revenue shifts, the largest drop was in dynamic random-access memory (DRAM) which saw a decline of $2.4 billion in revenue caused by sharp price declines as a result of oversupply.

Vendor Relative Industry Performance

Market share tables by themselves give a good indication of which vendors did well or badly during a year, but they do not tell the whole story. More often than not, a strong or weak performance by a vendor is a result of the overall market growth of the device areas that the vendor participates in. Gartner?s relative industry performance (RIP) index measures the difference between industry-specific growth for a company and actual growth, showing which are transforming their businesses by growing share or moving into new markets and choosing their customers wisely.

Hynix Semiconductor achieved the best RIP ranking and has now been placed in the top performing companies in Gartner?s RIP ranking for the last three years. In 2007, DRAM drove the revenue growth as Hynix?s DRAM revenue increased 19.1 percent compared with overall DRAM revenue, which declined by 7.1 percent. Hynix achieved this by being the most-aggressive vendor in adding capacity. However, with the market plagued with oversupply though 2007 and consequently steep average selling price declines, Hynix must take most of the blame for the market?s unprofitability in the second half of 2007.

Additional information is available Gartner?s Web site at http://www.gartner.com/DisplayDocument?ref=g_search&id=448010&subref=simplesearch.
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