iSuppli lowers 2007 chip tally on memory weakness

Mar. 20, 2008 – An unexpectedly soft memory market in 4Q07 has caused analyst firm iSuppli to trim about $2B off its totals for the full year, pushing overall annual growth down to 3.3% vs. a preliminary forecast of 4.1% in November.

The culprit, as usual, is the memory segment, which the firm says came in well below expectations in 4Q — -19.1% in worldwide DRAM revenues (vs. -4.7% projections), and -3.9% for NAND flash (instead of growing ~3.0% as expected), causing total memory chip revenue in 4Q to slide 11% sequentially instead of just -1.2%.

The memory meltdown was “a complete role reversal” compared with the prior year, where memory IC revenues helped prop up the overall industry, noted Dale Ford, SVP of market intelligence, for iSuppli, in a statement. Taking memory out of the 4Q07 picture, he noted, semiconductor market growth in the quarter would have been 2.4% — but with memory, it was -0.5%. (See revised 2007 rankings and growth below.)

Beyond 4Q, the full year 2007 wasn’t kind to most memory firms either, iSuppli noted. Nanya Technology and Qimonda saw annual revenues slide 32.4% and 26%, respectively. Market leader Samsung fared better but still lost 3.3% in sales. Still, some weathered the storm better than others — Hynix (15%) and Toshiba (14.5%) managed positive growth in the teens, with Elpida (8.8%) not far behind.

Outside of the memory segment, life was notably better for many firms. Infineon, which had slipped to 15th among global semiconductor suppliers in 2006 after carving out its memory biz (now Qimonda), climbed back into the top 10 rankings in 2007 (21.1% growth), due largely to its acquisition of TI’s DSL chip biz and its wireless baseband semiconductor unit. Sony posted “extraordinary” growth of 55.5% to also surge into the top 10, though iSuppli noted a big chunk of those sales were internal for its PlayStation 3 gaming console. Toshiba (20.2%) also helped supply chips for the PS3, and managed gains in the NAND flash sector too, iSuppli noted.

Two US fabless firms, Qualcomm (No. 13, 24.1%) and nVidia (No. 20, 34.4%) also moved up the 2007 supplier ranks. iSuppli noted that for the first time, the top-10 supplier ranks are within striking distance for a fabless semiconductor supplier.

Other tidbits from the iSuppli 2007 summary report:

– Best growth by chip segment was logic ASICs (12.9%), with Sony and Toshiba key drivers due to PS3 demand. nVidia also had a good year here. Optical semiconductors (7.4%), sensors and actuators (7.3%), and discretes (4.2%) also outperformed the broader market.

– The microprocessor segment managed 2.1% in 2007, led by Intel’s 8% growth, which came at the expense of rival AMD (-21.2%).

– Analog IC sales tallied 2.9% growth, with strong performances by Qualcomm and Infineon, each with >20% growth.

– Automotive electronics (11.2%) was the best growth opportunity for semiconductor applications in 2007.

– The Asia-Pacific region posted the best regional growth, with 6.6%.


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