Semi Industry Had Record Revenue In '05, Gartner Says

SAN FRANCISCO — Worldwide semiconductor revenue reached a record $235 billion in 2005, surpassing the industry's previous high of $223 billion set in 2000, according to market analyst firm Gartner Inc., which also released its final chip company top 10 ranking for the year (see chart below).

Semiconductor revenue increased 5.7 percent in 2005 from 2004, according to final results for the year, Gartner said.

“Personal computers and cellular telephones remain the largest drivers for semiconductor business,” said Richard Gordon, Gartner vice president of research, in a statement. “The popularity of MP3 players, however, accounted for dramatic growth among flash memory vendors in 2005.”

Final 2005 semiconductor revenue of $235 billion is consistent with what Gartner said when the firm announced its preliminary 2005 revenue numbers last December. However, final 2005 revenue growth of 5.7 percent is below the preliminary revenue growth estimate of 6.9 percent, due to a revision of 2004 total semiconductor industry revenue, which was revised upward to $222 billion from $220 billion. A Gartner spokesperson said via email that the 2004 figure was revised to "reflect a more comprehensive market coverage" and that vendors that were included in the 2005 market coverage were added to 2004 retrospectively.

Gartner's top 10 semiconductor vendor rankings did change between the firm's preliminary results announcement and the final results announcement Thursday (April 13). Philips Electronics NV, which had seemed conspicuous by its absence when the preliminary report was issued in December, actually finished the year in the No. 8 position, an improvement from the No. 9 position it held in 2004, according to the final Gartner report. See related image

The final 2005 top 10 chip vendors were, in order: Intel, Samsung Electronics, Texas Instruments, Toshiba, STMicroelectronics, Renesas, Infineon, Philips, Hynix Semiconductor and NEC, according to the report.

Advanced Micro Devices, which, including revenue from flash memory joint venture Spansion Inc. had been projected to finish in the tenth spot, slipped out of the top 10 in the final rankings.

Gartner said high PC demand helped Intel retain its position as the No. 1 semiconductor supplier in 2005. Intel’s revenue grew 12.6 percent, twice the market average, Gartner said.

Commodity memory demand bolstered the fortunes of Samsung and Hynix, Gartner said. Hynix moved into the top 10 for the first time in 2005, Gartner said.Samsung held the No. 1 position in DRAM, SRAM and NAND flash in 2005, Gartner said.

Gartner said Hynix's NAND flash revenue reached $1.5 billion, up from $212 million in 2004, an increase of more than 600 percent. Overall, Hynix grew 23 percent in 2005, the fastest growth rate among the top 10 semiconductor suppliers, Gartner said.

The entire NAND flash memory segment grew 71 percent between 2004 and 2005, Gartner said. Other fast growth markets included CMOS image sensors (28 percent), and consumer ASICs (14 percent), the firm said. The wireless ASIC segment, where TI was the market leader, grew 9 percent in 2005, Gartner said.

The regional trend of sales moving towards Asia/Pacific continued in 2005, Gartner said, with the Asia/Pacific region (including China, Taiwan, Korea and Singapore) growing by 11 percent, accounting for 44.5 percent of worldwide semiconductor revenue.

The Europe, Middle East and Africa (EMEA) region saw the second strongest revenue growth in 2005, 4 percent. The Americas had 1 percent growth in 2005 and Japan was flat with revenue increasing 0.2 percent, Gartner said.Gartner's final "Market Share: Semiconductor Revenue, Worldwide, 2005," report, which the firm said contains additional information on specific market segments and devices, is available for sale on the company's Web site.