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November 25th, 2009, 11:34 GMT · By

Samsung and Mediatek Overlooked by the 2009 Semiconductor Market Decline

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Samsung, leading suplier of semiconductor-based products
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Semiconductor revenues seem to have had hard luck this year. The market for wireless communications was the side of the IT industry that saw the smallest overall decline, specifically 8.2% (according to iSupply) and the data-processing segment holds the second place (9.8%.). On the other hand, the market segment that was hit the hardest was the automotive electronics industry, with a total decline of 26.1%, closely followed by industrial electronics and consumer electronics (negative 15.2% and 15.1%, respectively).

"The year 2009 will be remembered as one of the most dismal years in the history of the global semiconductor business, with a plunge of more than US$32 billion in revenues compared to 2008," Dale Ford, senior vice president at iSuppli, said. "However, iSuppli's preliminary estimate of a 12.4% decline is far better than expectations from early 2009 of a more than 20% plunge."

iSupply shows the truth whenever it sees it, whether ugly or not. Global semiconductor revenues dropped by 12% this year and the only reason why the performance of this industry wasn't any worse (as was actually expected) lay in the impressive results achieved in the fields of memory and consumer electronics and wireless chips. The 12.4% drop in revenues comes after a 21.4% in the fourth quarter of 2008 and an 18% drop in the first quarter of 2009.

"There was little room for anything but pessimism after the industry suffered a sequential revenues decline of 21.4% in the fourth quarter of 2008 and an 18% drop in the first quarter of 2009," Ford indicated. "However, semiconductor sales rebounded smartly after that, with sequential increases of more than 18% in the second and third quarters and an expected 5% rise in the fourth quarter."

Even if the sales will increase, the only leading companies expected to see any overall growth are Samsung and Mediatek, while only 27 of the companies in the top 135 are seen as having at least a remote chance of a revenue growth during this year. Qualcomm seems to have managed to stagnate thanks to its performance in the wireless market sector, while Infineon lost its spot in the top 10 after its spinout of Lantiq, its wireline semiconductor business.

"Samsung is benefiting from its dominance in the memory market, whose performance was dramatically better than the semiconductor industry as a whole," Ford added. "The company is the number one supplier of both DRAM and NAND flash, the two largest segments of the memory market. Samsung managed to outperform the memory market partly due to its early leadership in new, higher-margin memory products, such as DDR3 SDRAM."

The Asia-Pacific region yielded both the greatest supply and the greatest amount of semiconductor sales, whereas companies headquartered in the European region are expected to suffer a combined drop of 24.2% (with shipments to Europe expected to suffer a decline of 20.8%).


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