Overall Market for Consumer Device Semiconductors Declines in 2008

Overall Market for Consumer Device Semiconductors Declines in 2008, But Pockets of Growth Persist, According to IDC

SAN MATEO, Calif. — The difficult macroeconomic environment in 2008 resulted in lower personal income growth and a sharp drop in personal consumer consumption. This had a direct impact on the consumer electronics market and the semiconductor suppliers to that market. According to International Data Corporation (IDC), the worldwide semiconductor market for consumer devices declined 2.6% from $44.0 billion in 2007 to $42.9 billion in 2008.

Despite the overall downturn, pockets of growth could be found within specific application areas. The digital TV and set top box semiconductor markets grew 7.2% and 10.6%, respectively. In contrast, semiconductor revenues for DVD players/recorders declined 1.7% year over year, while the semiconductor markets for portable media players and video game systems declined by 10.5% and 11%, respectively.

A new IDC study provides detailed analysis of five leading application areas for consumer device semiconductors: digital TV (DTV) (including digital CRT, LCD, Plasma display, and rear projection TVs), set-top boxes (STB), DVD players (including recorders and Blue-ray systems), Video Game Systems (including consoles and portable systems), and portable media players (PMP) (including flash and HDD based PMPs). Also included is an “Other” category, which includes: digital still cameras, digital video cameras, digital photo frames, personal navigation devices (PNDs) and GPS, digital home audio products, HD receivers, consumer projectors, white goods/home appliances, and other miscellaneous consumer products.

With five major and a number of smaller application areas, the market for consumer semiconductors is competitive and diverse. The fragmented nature of the market provides opportunities for many large and small suppliers, with the top 20 companies accounting for less than two thirds of the total consumer semiconductor market. Toshiba had the largest share of the total market with a 10.2% share based on revenues followed by Samsung Electronics with an 8.5% share. Renesas earned the third largest market share at 4.9% while STMicroelectronics and NEC Electronics rounded out the top 5 suppliers with 4.6% and 3.9% market share, respectively.

Worldwide Consumer Semiconductor Revenues and Market Share
by Application Area (revenues in US$ millions):

“The market for consumer semiconductors is at a critical point. While consolidation is occurring at both the product and IC levels, new competitors are emerging that have an advantage at providing low-cost goods and can serve the needs of OEMs focused on developing markets,” said Michael J. Palma, senior research analyst, Consumer Device Semiconductors. “Semiconductor firms need to focus on and align their businesses to address future opportunities in the consumer space.”

Looking forward, IDC expects the consumer device semiconductor market to continue to decline by more than 13% in 2009, followed by a modest gain of 1% in 2010. Further market growth will be inhibited by a number of factors, including the consolidation of features into smart phones and other devices and integration reducing the number integrated circuits (ICs) in devices. And with consumer spending expected to remain depressed, market revenues are not likely to return to pre-recession levels until after 2013.

“When the economy rebounds, the trend toward home entertainment and connected mobile devices will present a growth opportunity for semiconductor players in the consumer device space,” says Ajit Deosthali, research manager, Consumer Device Semiconductors.

The IDC study, Worldwide Consumer Device Semiconductor 2008 Vendor Shares (Doc #220202), provides a vendor revenue and market share analysis for the worldwide consumer device semiconductor market for 2007 and 2008. In addition to the overall market, this study provides detailed analysis for five leading application areas for consumer device semiconductors: digital TV (DTV), set-top boxes (STBs), DVD players, videogame systems, and portable media players (PMPs). Also included is an Other consumer device category, which includes digital still cameras, digital video cameras, digital photo frames, personal navigation devices (PNDs) and GPS, digital home audio products, HD receivers, consumer projectors, white goods/home appliances, and other miscellaneous consumer products. Revenue in the consumer device semiconductor market reflects all types of semiconductor devices, including analog IC, ASICs, ASSPs, digital bipolar, discrete sensors and actuators, logic IC, memory, microcomponents, and optoelectronics.