iSuppli Ranks Chip Suppliers, Raises 2005 Semiconductor Outlook
The big get bigger, as Intel leads top players in growth El Segundo, Calif., Dec. 1, 2005
-Intel Corp. in 2005 is expected to solidify its position as the worlds leading semiconductor supplier, posting the highest revenue growth among the top-10 chip makers for the year, according to a preliminary ranking from iSuppli Corp.
The U.S. microprocessor giant is expected to generate semiconductor revenue of $35.8 billion in 2005, up 14.4 percent from $31.3 billion in 2005, according to iSuppli. This represents nearly 6 percentage points more revenue growth than the next-fastest growing company among the top-five suppliers, Texas Instruments Inc. (TI).
The table attached presents iSupplis preliminary ranking of the worlds top-25 semiconductor suppliers in 2005.
Much attention has been focused on the market share gains that Advanced Micro Devices Inc. (AMD) of the United States has made in the PC microprocessor market at the expense of Intel. However, Intels overall semiconductor revenue growth actually is expected to surpass AMDs projected rise of 11.8 percent this year, said Dale Ford, vice president, market intelligence for iSuppli. iSuppli raises 2005 chip forecast
Based on its quarterly semiconductor market-share research of the 100 leading semiconductor suppliers, iSuppli has increased its forecast for global chip revenue in 2005 to $237.3 billion, up 4.4 percent from $227.3 billion in 2004. iSupplis previous forecast, issued in September, called for 2.4 percent growth in 2005.
Worldwide semiconductor growth exceeded expectations in the third quarter, rising by 4.5 percent from the same period in 2004, and by 9.3 percent from the second quarter of 2005. Based on projected company sales for the fourth quarter, iSuppli estimates that fourth-quarter revenue will grow by 5.3 percent sequentially. The big get bigger
Along with Intel, the number-two and three chip suppliers-Samsung Electronics Co. Ltd. of Korea and U.S.-based TI-also are expected to solidify their positions. Samsung in 2005 is projected to increase its revenue to $17.1 billion, up 8.5 percent from $15.8 billion in 2004. TI is set to increase its chip sales to $11.1 billion, an 8.6 percent increase from $10.2 billion in 2004.
Samsung and TI have consistently increased their share of the market since 2001, and now have clearly separated themselves from the rest of the top-10 semiconductor suppliers in revenue market share, Ford noted.
Looking at the other leading chip suppliers, number-four-ranked Toshiba Corp. of Japan is expected to generate 7 percent growth, allowing it to pass European chip makers STMicroelectronics and Infineon Technologies AG and rise back to the top five again in 2005, after slipping to seventh place in 2004.
Infineon has announced plans to spin-off its memory business into a separate company in 2006. Based on 2005 revenues, Infineon would be ranked number 15 if its memory revenues were excluded.
This means that five companies are expected to compete for ranks eight, nine, and 10 in 2006: Philips Semiconductor, AMD, NEC Electronics, Freescale and Hynix. The difference between number-8 Philips Semiconductors market share and 12th-place Hynix Semiconductor Inc.s market share is estimated to be only 0.11 of a percentage point in 2005. Second-tier shakeups
Based on expected revenue growth of 2.4 percent in 2005, Freescale Semiconductor Inc. of the United States is expected to drop out of the top 10 and end the year ranked in 11th place, just ahead of Koreas Hynix Semiconductor Inc. With impressive growth of 18.5 percent, Hynix is set to be one of only three companies in the top 25 to achieve revenue growth of more than 15 percent in 2005.
IBM Microelectronics chip revenue is expected to rise by 30 percent, enabling it to move back into the top 20, up from 21st place in 2004. nVidia Corp.s forecasted growth of 22.8 percent will propel it to number 24, up from the 29th rank in 2004.
With ATI Technologies Inc. capturing the 25th position in 2005, a total of three fabless semiconductor companies, including Qualcomm Inc. and nVidia, will be among the top 25 for the first time. Semiconductor laggards
Seven companies among the top 25 are expected to experience revenue declines in 2005. Hardest hit will be NEC, with a 12.2 percent decline; Infineon, with an 8.7 percent drop; Sanyo Electric Co., with an 8.5 percent decline and Renesas Technology Corp. with a 7 percent decrease. Japan loses ground
Of the 20 Japanese semiconductor makers tracked by iSuppli market share research on a quarterly basis, 12 are projected to see declining revenues in 2005.
A review of historical quarterly market share data reveals a steady decline in the combined market share of Japanese companies beginning in the second quarter of 2003. Between the second quarter of 2003 and the fourth quarter of 2005, the combined market share of Japanese companies is projected to fall to 23.4 percent, down from 27.3 percent, a contraction of nearly 4 percentage points.
In contrast, the combined annual market shares of companies headquartered in the Asia/Pacific region grew by 3.6 percentage points during this same period. This is a source of serious concern in the Japanese semiconductor industry and is spurring a close evaluation of the future direction of the countrys semiconductor industry.
Contact iSuppli Corp.