Worldwide semiconductor revenue grew 12.5% in 2018

Gartner Says Worldwide Semiconductor Revenue Grew 12.5 Percent in 2018

STAMFORD, Conn. — Worldwide semiconductor revenue totaled $474.6 billion in 2018, a 12.5 percent increase from 2017, according to final results by Gartner, Inc. 2018 growth was weaker than the previous year (21.9 percent) due to memory growth slowing to 24.9 percent versus 2017 growth of 61.8 percent.

“Despite slowing growth, the memory market was still the largest semiconductor market, accounting for 34.3 percent of revenue,” said Andrew Norwood, research vice president at Gartner. “This was driven by increases in average selling prices (ASPs) for DRAM for the majority of 2018. However, ASPs began to decline in the fourth quarter and this will continue through most of 2019 due to oversupply conditions.”

Samsung Electronics increased its lead as the No. 1 semiconductor vendor due to the booming DRAM market. Currently, 88 percent of the company’s revenue comes from memory sales. “Samsung’s lead is literally built on sand, in the form of memory silicon, and those shifting sands in 2019 will almost certainly lead to Samsung losing its No. 1 semiconductor crown to Intel in 2019,” said Mr. Norwood.

Intel’s semiconductor revenue grew by 12.9 percent compared with 2017, despite delays in the introduction of 10 nm manufacturing process and a constrained low-end CPU supply situation in the second half of 2018. SK hynix experienced the strongest growth among the top 10 worldwide semiconductor vendors with a 37.4 percent increase in 2018 (see Table 1).

Table 1. Top 10 Semiconductor Vendors by Revenue, Worldwide, 2018 (Millions of U.S. Dollars)

2018  2017                              2018  2018 Market     2017   2017-2018
Rank  Rank  Vendor                   Revenue    Share (%)  Revenue  Growth (%)
----  ----  -----------------------  -------  -----------  -------  ----------
1     1     Samsung Electronics       73,649         15.5   61,158        20.4
2     2     Intel Corporation         66,290         14.0   58,725        12.9
3     3     SK Hynix                  36,240          7.6   26,370        37.4
4     4     Micron Technology         29,742          6.3   22,895        29.9
5     6     Broadcom                  16,261          3.4   15,405         5.6
6     5     Qualcomm                  15,375          3.2   16,099        -4.5
7     7     Texas Instruments         14,593          3.1   13,651         6.9
8     11    STMicroelectronics         9,213          1.9    8,021        14.9
9     9     Western Digital            9,078          1.9    9,159        -0.9 
10    10    NXP Semiconductors         9,022          1.9    8,746         3.2
            -----------------------  -------  -----------  -------  ----------
            Top-10                   279,463         58.8  240,229        16.3
            Others (outside Top 10)  195,168         41.2  181,494         7.5
            -----------------------  -------  -----------  -------  ----------
            Total Market             474,631        100.0  421,723        12.5

Source: Gartner (April 2019)

The second-largest category — application-specific standard products (ASSPs) — saw growth of only 5.1 percent due to a stalling smartphone market combined with a tablet market that continues to decline. Vendors that rely heavily on these end markets to sell application processors, modems and other components in many cases saw semiconductor revenue decline. Leading vendors in these areas, including Qualcomm and MediaTek, are aggressively expanding into adjacent markets with stronger prospects for growth, including automotive and Internet of Things (IoT) applications. However, similar to the maturation of the PC market, a mature smartphone market is likely to continue to be a headwind in 2019 for companies with high exposure.