Global semiconductor revenue went down 11.9 per cent in 2019 from 2018 and stood at $418.3 billion according to preliminary results by Gartner. The report also said that Intel regained the top spot in the market. The downturn in the memory market negatively impacted many vendors like Samsung Electronics. Samsung took the first spot in terms of revenue in 2017 and 2018. Andrew Norwood, research vice president at Gartner said, “The memory market, which accounted for 26.7 per cent of semiconductor sales in 2019, experienced a 31.5 per cent decline in revenue in 2019.†DRAM revenue declined He added that within memory, dynamic random access memory (DRAM) revenue declined 37.5 per cent due to an oversupply that started at the end of 2018 and lasted throughout 2019. The oversupply was caused by a sudden fall in demand from the hyperscale market. It showed excessive OEM inventory levels that took the first half of the year to correct said Norwood. He said, “Excessive inventory at DRAM vendors in the second half of 2019 pushed pricing lower and resulted in an average selling price (ASP) decline of 47.4 per cent in 2019.†Gartner further said that Intel’s semiconductor revenue declined 0.7 per cent in 2019. this was due to slowdown in the server market, an ongoing constrained CPU supply and sale of its cellular modem business to Apple in Q4 of 2019. Samsung took the second position due to the downturn in the memory market. Samsung’s memory revenue, which accounted for 82 per cent of its sales, declined 34 per cent in 2019. NAND market began to stabilise in July 2019 The report said, “Within the memory segment, NAND flash experienced a milder 2019 downturn than the overall memory market, with a revenue decline of 23.1 per cent due to elevated levels of inventory at the end of 2018 that were exacerbated by sluggish demand in the first half of 2019. The NAND market began to stabilise in July 2019, aided by a power outage in the fabs jointly owned by KIOXIA and Western Digital. This power outage acted as a catalyst to clean out vendor inventories and prompted prices to increase from unsustainable lower levels.†Gartner added that the recovery in NAND will continue in 2020. This is due to low supply bit growth being overwhelmed by strong demand from solid-state drive (SSD) adoption. It will also see recovery due to ramp up of 5G smartphones. Optoelectronics growth of 2.4 per cent As per the report, revenue growth of other device categories varied between analogue products’ decline of 5.4 per cent and optoelectronics growth of 2.4 per cent. Analogue’s performance was due to weakened equipment markets like industrial and legacy automotive. Norwood added, “In 2020, we expect to see semiconductor market revenue increase after the high inventory clearance to drive up the chip ASP, especially in the memory sector. The US-China trade war seems to be easing as we move into 2020.†Source: https://www.electronicsb2b.com/
