Monday 11, January 2016

Dubai – MENA Herald: Worldwide semiconductor revenue totaled $333.7 billion in 2015, a 1.9 percent decrease from 2014 revenue of $340.3 billion, according to preliminary results by Gartner, Inc. The top 25 semiconductor vendors’ combined revenue increased 0.2 percent, which was more than the overall industry’s growth. The top 25 vendors accounted for 73.2 percent of total market revenue, up from 71.7 percent in 2014.

“Weakened demand for key electronic equipment, the continuing impact of the strong dollar in some regions and elevated inventory are to blame for the decline in the market in 2015,” said Sergis Mushell, research director at Gartner. “In contrast to 2014, which saw revenue growth in all key device categories, 2015 saw mixed performance with optoelectronics, nonoptical sensors, analog and ASIC all reporting revenue growth while the rest of the market saw declines. Strongest growth was from the ASIC segment with growth of 2.4 percent due to demand from Apple, followed by analog and nonoptical sensors with 1.9 percent and 1.6 percent growth, respectively. Memory, the most volatile segment of the semiconductor industry, saw revenue decline by 0.6 percent, with DRAM experiencing negative growth and NAND flash experiencing growth.”

Intel recorded a 1.2 percent revenue decline, due to falls in PC shipments (see Table 1). However, it retained the No. 1 market share position for the 24th year in a row with 15.5 percent market share. Samsung’s memory business helped drive growth of 11.8 percent in 2015, and the company maintained the No. 2 spot with 11.6 percent market share.

“The rise of the U.S. dollar against a number of different currencies significantly impacted the total semiconductor market in 2015,” said Mr. Mushell. “End equipment demand was weakened in regions where the local currency depreciated against the dollar. For example in the eurozone, the sales prices of mobile phones or PCs increased in local currency, as many of the components are priced in U.S. dollars. This resulted in buyers either delaying purchases or buying cheaper substitute products, resulting in lower semiconductor sales. Additionally, Gartner’s semiconductor revenue statistics are based on U.S. dollars; thus, sharp depreciation of the Japanese yen shrinks the revenue and the market share of the Japanese semiconductor vendors when measured in U.S. dollars.”

The NAND market continued to deteriorate throughout the year. As a result, revenue grew only 4.1 percent in 2015, fueled by elevated supply bit growth that resulted in an aggressive pricing environment. The tumultuous NAND pricing environment rippled through most of the NAND solutions, particularly solid-state drives (SSDs), which continue to encroach on hard-disk drives (HDDs). The ensuing price war in SSDs further pressured the profitability of the NAND flash makers amid the biggest technology transition in flash history — 3D NAND. While 3D NAND commercialization was modest, it was limited to only one vendor — Samsung. Modest revenue gains have not stopped investment in NAND flash and 3D technology, with all vendors continuing to spend aggressively in the technology and most with new fabs.

After 32.0 percent revenue growth in 2014, the DRAM market hit a downturn in 2015. An oversupply in the commodity portion of the market caused by weak PC demand led to severe declines in average selling prices (ASPs), and revenue contracted by 2.4 percent compared with 2014. The oversupply and the extent of ASP declines could have been significantly worse if Micron Technologies’ bit growth had performed in line with its South Korean rivals. Fortunately for the market, the company saw negative bit growth due to its transition to 20 nm, sparing the industry from an even more severe downturn.