Analyst: “Competitiveness” separates top chip suppliers in 2007

November 28, 2007 – Preliminary estimates of 2007 global semiconductor sales show widely varied performances by individual companies in specific market segments, indicating that amid slowing growth for semiconductor sales, companies that have better executed or capitalized on industry trends and events were able to outperform the market and their competition.

iSuppli’s latest estimates indicate chip sales will rise 4.1% in 2007 to $270.9 billion, up from $260.2B last year, slightly better than the firm’s 3.5% projection in September, thanks to a more solid 3Q performance — 11.9% increase in sales that slightly exceeded expectations of 9.9%, noted Dale Ford, VP of market intelligence for iSuppli, in a statement.

Perennial leader Intel is expected to show 7.7% higher chip sales this year, nearly reaching $34B, up from $31.5B in 2006. That growth rate exceeds the overall semiconductor industry growth rate of 4.1%, and dwarfs rival AMD, whose sales are expected to decline by 22.7% this year, from $7.5B to $5.8B.

“Throughout most of the year, Intel successfully defended much of the market share that it won from AMD in the first quarter in the PC microprocessor segment due to the success of its lines of dual- and quad-core chips,” said Ford. “This represents a major reversal of fortune compared to 2006, when AMD had the advantage with its popular dual-core microprocessors, allowing it to gain share from Intel.”

By far the best growth in 2007 (nearly 57%, to ~$8B) goes to Sony, beating overall consumer-targeted semiconductor revenue growth of just 8.9%, nearly entirely due to the company’s PlayStation 3 videogame console. Toshiba, riding its NAND output and increasing cell processor interests, is expected to post the second-best growth (24%) among the top 20 suppliers, returning to the top-3 for the first time since 2001, notes the Nikkei daily. Fellow Japanese suppliers Renesas and NEC are expected to see revenues decline 3% and 0.8%, respectively.

Also with a good showing in iSuppli’s rankings is Qualcomm, up from 16th to 12th thanks to 23.7% growth driven by in large part by business in mobile handsets, while demand for wireless communications chips propelled Infineon from No. 15 to No.10, with 14.6% sales growth. Heading in the other direction is Texas Instruments (-3.4%), which counts nearly half (45%) of its sales from wireless chips and is taking a major hit as baseband customer Nokia diversifies its supplier base. And Freescale also slides out of the top 10 list (-10.7%), as largest customer Motorola continues to lose share to Nokia and Samsung.


Top 20 worldwide semiconductor suppliers (preliminary)
(Revenues in US $M)

Rank (2006)…..Company Name…………….2006……2007……..% change…..% of total

1 (1)……………Intel…………………………………..31,542……33,973……..7.7%……….12.5%
2 (2)……………Samsung Electronics……….19,842……20,137……..1.5%……….7.4%
3 (4)……………Toshiba…………………………….10,141……12,590…….24.1%……….4.6%
4 (3)……………Texas Instruments……………12,600……12,172…….-3.4%……….4.5%
5 (5)……………STMicroelectronics……………..9854……….9991……..1.4%……….3.7%
6 (7)……………Hynix……………………………………7865……….9614…….22.2%……….3.5%
7 (6)……………Renesas Technology………….7900……….8137……..3.0%……….3.0%
8 (14)………….Sony……………………………………5129……….8040…….56.8%……….3.0%
9 (10)………….NXP…………………………………….5874……….6038……..2.8%……….2.2%
10 (15)………..Infineon Technologies………..5119………5864…….14.6%……….2.2%
11 (8)………….AMD…………………………………….7506………5792……-22.8%……….2.1%
12 (16)………..Qualcomm…………………………..4529……..5603…….23.7%……….2.1%
13 (11)………..NEC Electronics…………………..5601……..5555…….-0.8%……….2.1%
14 (9)………….Freescale Semiconductor……5988……..5349……-10.7%……….2.0%
15 (13)………..Micron Technology……………….5247……..4943…….-5.8%……….1.8%
16 (12)………..Qimonda……………………………..5413………4186……-22.7%……….1.5%
17 (17)………..Matsushita Electric………………4022………3946…….-1.9%……….1.5%
18 (19)………..Elpida Memory…………………….3527………3836……..8.8%……….1.4%
19 (18)………..Broadcom…………………………..3668……….3731……..1.7%……….1.4%
20 (20)………..Sharp Electronics……………….3341……….3584……..7.3%……….1.3%
…………………Top 20 Companies ……….164,708…….173,081……..5.1%……….63.9%
…………………All Others …………………………..95,513……97,849……..2.4%……….36.1%
…………………Total Semiconductor …….260,221…….270,930……..4.1%……….100.0%

Source: iSuppli Corp.

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