14 DAY TRIAL // As the IT industry is facing a financial downturn, iSuppli has released its preliminary 2008 top-20 chip rankings, allowing us to draw a picture of the market. According to the firm, Intel, Samsung, Texas Instruments, Toshiba, and STMicroelectronics hold the top five positions, while other known makers like Advanced Micro Devices or NVIDIA are placed No. 11 and No. 20.
The economic turmoil has affected memory chip manufacturers the hardest. According to the rankings, the South Korea-based Hynix dropped from No. 6 to No. 9, while Micron Technology is placed No. 16. Both companies are reported to be restructuring, Micron cutting jobs and shutting plants, while Hynix is seeking for outside investors. According to iSuppli, Micron should post revenues down by 9.2 percent in 2008, while Hynix is expected to show revenue decreased by about 29 percent in 2008.
The market research company also revealed that Samsung Electronics, the world's largest memory chip supplier and No. 2 chipmaker, is expected to see revenue declined by 9.1 percent this year. At the same time, Toshiba, a major flash memory chip manufacturer, should post a 5.9 percent drop in chip revenue in 2008. iSuppli stated that 2008 would become “a year to forget” for memory chip suppliers.
Infineon, the No. 10 Munich, Germany-based company, announced on Wednesday that it expected the revenue for 2009 to drop by at least 15 percent from the previous year. Infineon is a manufacturer of chips used in automotive and communication devices, but it is also active on the memory chip market through its subsidiary Qimonda.
According to iSuppli, sales of memory integrated circuits (ICs) should lower by as much as 16.9 percent, which would result in a 2 percent decline of global semiconductor revenue in 2008. “Only two out of the Top-29 memory IC suppliers, i.e. companies that are expected to earn roughly $100 million or more in 2008, will see their memory IC revenue grow in 2008. For the memory IC business, 2008 can only be described as disastrous,” said Dale Ford, senior vice president of market intelligence services for iSuppli.
The economic crisis and the lowered semiconductor revenue this year will not affect only memory suppliers. The market research firm expects for six of the top-10 chip suppliers to post revenue drops in 2008, and that would also include some companies not focusing on memory, like Texas Instruments, Renesas Technology, and Sony. “In the face of increasingly negative economic news, orders for semiconductors have virtually stopped,” said iSuppli.
“About the only good thing that can be said about the 16.9 percent decline in memory revenue in 2008 is that it pales in comparison to the 48.2 percent plunge in 2001,” Ford stated. Moreover, it seems there are some companies that performed rather well. Qualcomm is predicted to see a revenue growth of 19.6 percent, which should raise it to the eighth position this year, up from the 13th in 2007.