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Friday, December 02, 2011
 Intel Reasserts Semiconductor Market Leadership in 2011
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Message Text: After three years of seeing its dominant position in the global semiconductor market whittled away by aggressive competition from Samsung, Intel is set to reverse the trend in 2011, with a combination of strong sales and an acquisition allowing the company to rebuild its margin of market leadership.

U.S.-based Intel in 2011 is set to sell $49.7 billion worth of semiconductors, up an impressive 23 percent from $40.4 billion in 2010, according to the IHS iSuppli Semiconductor Value Chain Service at information and analysis provider IHS. This will allow Intel to outgrow the overall semiconductor market and boost its share of the market to 15.9 percent, up from 13.2 percent in 2010, as presented in Table 1 below.

With this strong performance, Intel increased its lead over second-ranked Samsung to 6.5 percentage points. The increase ended a three-year period that saw Samsung of South Korea close the gap with Intel from a 6.5 percentage point margin in 2008 to a 3.9 point difference in 2010.

"In a challenging year for the semiconductor market, Intel achieved success on all fronts, expanding its core microprocessor and memory businesses, while also capitalizing on a major acquisition," said Dale Ford. "This allowed the company to outgrow the market and expand its lead over its closest competitors, defying the impact of weak economic conditions and catastrophic natural disasters in Japan and Thailand."

Intel derives most of its semiconductor revenue from selling microprocessors (MPU) and NAND flash memory - two of the hottest segments of the chip industry in 2011. These areas are set to generate double-digit revenue growth of between 15 and 20 percent this year.

Meanwhile, Intel's revenue was boosted by its acquisition of Infineon Technologies AG's wireless solutions business.

Samsung, the world's leading supplier of NAND, also is benefitting from the growth of this memory segment in 2011. Furthermore, the South Korean electronics giant is posting strong sales growth in other product lines like mobile applications processors, CMOS image sensors and display drivers.

However, Samsung also is the leading supplier of DRAM, which represents a weak segment of the global semiconductor market, with a gut-wrenching 27 percent decline in total market revenue expected this year.

Combined with poor market conditions in other memory segments, this will limit Samsung's revenue growth to 3 percent in 2011, far less than Intel's growth.

No. 3 Texas Instruments in 2011 purchased fellow U.S. supplier National Semiconductor, helping it to rise one rank to supplant Japan?s Toshiba as the world?s third-largest chip supplier. TI?s revenue is set to increase by a relatively strong 8.4 percent for the year.

Qualcomm will see its semiconductor revenue jump by an amazing 39.9 percent in 2011, courtesy of an extra boost from its acquisition of Atheros Communications. This will propel Qualcomm up the rankings by three spots, rising to No. 6, up from ninth place in 2010.

However, the biggest jump in rank among in 2011 is expected to be at ON Semiconductor of the United States, which will achieve growth of nearly 50 percent, the highest rate of increase among any Top 20 supplier. ON's acquisition of Sanyo Semiconductor from Panasonic Corp. of Japan will boost it seven places to No. 19 in the rankings.

Conversely, the sale of Sanyo will contribute to Panasonic's 32 percent plunge in revenue?causing it to fall by five positions to No. 20.

Bad Memories of 2011

Along with the major decline in DRAM revenue, all other memory segments besides NAND flash are suffering contractions in 2011, adversely impacting semiconductor suppliers that depend on sales of these devices.

Global revenue for EEPROM, SRAM and NOR flash memory all will decline by double-digit percentages this year.

Consequently, some of the biggest decreases will be suffered by memory suppliers, such as No. 8 Hynix Semiconductor, No. 9 Micron Technology and No. 15 Elpida Memory whose revenue will fall by 14.2 percent, 17.3 percent and 40.2 percent, respectively.

Based on the results of preliminary 2011 market share research from IHS, the forecast for global semiconductor market growth has been raised slightly to 1.9 percent, up from the previous outlook of a 1.2 percent increase.
 
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