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4Q12 revenues increase didn't help ailing semiconductor market

Posted: 15 Apr 2013     Print Version  Bookmark and Share

Keywords:semiconductor market  market analysis  2012 IC revenues  IHS 

The last quarter of 2012 showed a glimmer of hope for the otherwise despondent year of the semiconductor market. Of the 25 top chipmakers, only eight companies showed growth in revenue. Nine companies, on the other hand, were not as lucky as they suffered double-digit declines.

Global semiconductor revenue in 2012 declined by 2.2 per cent from 2011, this is according to final results from the IHS iSuppli Competitive Landscaping Tool (CLT). The preliminary forecast issued by IHS in December projected a drop of 2.3 per cent.

The modest improvement in the final results came from year-over-year growth in the fourth quarter that came in slightly better than estimated, topping out at a 2.8 per cent increase. The preliminary estimate had predicted a 1.9 per cent expansion.

"The last three months were the only quarter in 2012 that generated a year-over-year increase in semiconductor market revenue, but that growth was too little and too late to salvage a terrible year for chipmakers," said Dale Ford, senior director at IHS. "Even so, the stronger performance in the fourth quarter represents a positive signal for the semiconductor market, marking the beginning of a new growth cycle in the industry that will be sustained though 2013. IHS predicts global semiconductor revenue will rise by 5.6 per cent in 2013, bringing an end to the slump of 2012."

Semiconductor body count
Semiconductor industry growth in 2012 slipped from stagnation in the first half to a slump in the second half, widely affecting various players in the market.

Among the top 25 suppliers, the only companies to expand revenue in 2012 were No. 2 Samsung, No. 3 Qualcomm, No. 9 Broadcom, No. 11 Sony, No. 14 NXP, No.15 Nvidia, No.18 MediaTek, and No. 24 LSI.

The remaining 17 suppliers suffered revenue declines. Companies whose revenue fell by double-digit percentages were No. 4 Texas Instruments, No. 5 Toshiba, No. 6 Renesas, No. 8 STMicroelectronics, No. 12 Advanced Micro Devices, No. 16 Freescale, No. 17 Elpida, No. 21 Panasonic and No. 22 On Semiconductor.

"The semiconductor downturn had an extremely broad impact, as global economic uncertainty and weakness affected companies across all regions as well as the vast majority of products and application markets," Ford observed. "Almost every major semiconductor product market suffered a decline in 2012, with double-digit drops in the major memory and discrete categories."

With semiconductor suppliers' financial condition so weak, merger and acquisition activity among the top companies was nearly non-existent in 2012—a stark contrast to the high level of activity seen in 2011.


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