According to a new study from Gartner, global semiconductor industry revenue totaled $418.3 billion in 2019, down 11.9 percent from 2018. Intel has regained the top spot in the market because of the negative impact of the memory market downturn on Samsung Electronics, the study said. In terms of revenue, Samsung is at the top of the market in both 2018 and 2017.
“The memory market accounted for 26.7 percent of semiconductor sales in 2019, and revenue fell 31.5 percent in 2019,” Andrew Norwood, vice president of research at Gartner, said in a statement. In the memory market, DRAM revenue fell 37.5 percent as a result of oversupply from the end of 2018, which continued throughout 2019. The oversupply is due to a sudden decline in demand in hyperscale markets. This indicates that OEM inventory levels are too high, resulting in corrections in the first half of the year. Overstocking by DRAM suppliers in the second half of 2019 pushed down prices and led to a 47.4% decline in average sales prices (ASPs) in 2019. “
Samsung’s woes have allowed Intel to regain its market leadership, but Gartner said Intel itself was flat in 2019. According to Gartner, Intel’s semiconductor revenue fell 0.7 percent in 2019 as a result of a slowdown in the server market, continued limited CPU supply and the sale of its cellular baseband business to Apple in the fourth quarter of 2019.
Gartner noted that oversupply and declining demand for DRAM and NAND flash memory led to a 34 percent drop in Samsung’s memory revenue in 2019, which accounted for 82 percent of its sales. Here’s Gartner’s list of Top 10, the global semiconductor supplier sitted by revenue for 2019:
Figure: Top 10, a global semiconductor supplier, 2019 (in revenue, in millions of dollars), Source: Gartner.
According to Gartner, NAND Flash’s 2019 slump was milder than the overall memory market, with revenue down 23.1 percent, largely due to higher inventory levels at the end of 2018, exacerbated by weak demand in the first half of 2019. The NAND market will stabilize in July 2019. Gartner expects the Recovery in the NAND market to continue in 2020, as strong demand from solid state drive (SSD) applications and the rise of 5G smartphones offset low supply growth.
Gartner also noted that the analog market fell 5.4 percent year-on-year due to weakness in the industrial and automotive markets. The optoelectronics market has maintained strong growth due to strong sales of smartphone cameras. Overall market conditions are expected to improve this year.
“In 2020, we expect that the high level of inventory clearance will drive up average chip prices, particularly in memory, which will drive revenue growth in the semiconductor market,” said Andrew Norwood. “