Gartner's Final Semiconductor Market Share Results Show Industry Grew 10 Percent in 2006

Strong DRAM and Wireless Communications Sales Offset Slowing PC Processor Revenue

STAMFORD, Conn., April 4, 2007 — Worldwide semiconductor revenue totaled $262.7 billion in 2006, a 10.2 percent increase from 2005 revenue of $238.3 billion, according to final results by Gartner, Inc.

“Diverging trends in key markets contributed to a moderate overall growth,” said John Barber, research director at Gartner. “Slowing growth rates in traditional markets such as PC processors were offset by strong gains in DRAM and wireless communications.”

Intel remained the No. 1 vendor, but it had a challenging year, experiencing a worldwide revenue decline of 12 percent (see Table 1). Until the fourth quarter of 2006, Intel lost share with its CPUs in the server and consumer segments to AMD.  AMD executed with impressive gains in market share, including the mobile, desktop, and server product families in Dell.  Revenues were further eroded by an across-the-board price war which impacted Intel the most.

However, late 2006 marked a turnaround for Intel, with the release of its Core 2 Duo and Xeon 5100 series products based on the Merom micro-architecture of dual-core, 65nm CPUs. Gartner analysts expect Intel to re-capture losses in market share in 2007 with their new product offerings. 

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

2006 Rank	2005 Rank	Company	2006 Revenue	2006 Market Share (%)	2005 Revenue	2005-2006 Growth (%)
1	1	Intel	30,437	11.6	34,590	-12.0
2	2	Samsung Electronics	20,138	7.7	18,347	9.8
3	3	Texas Instruments	11,984	4.6	10,119	18.4
6	4	Infineon Technologies (incl. Qimonda)	10,533	4.0	8,205	28.4
5	5	STMicroelectronics	9,854	3.8	8,882	10.9
4	6	Toshiba	9,783	3.7	8,984	8.9
9	7	Hynix Semiconductor	8,007	3.0	5,723	39.9
7	8	Renesas Technology	7,900	3.0	8,101	-2.5
14	9	Advanced Micro Devices	7,434	2.8	3,995	86.1
11	10	Freescale Semiconductor	6,049	2.3	5,599	8.0
		Others	140,571	53.5	125,744	11.8
		Total Market	262,690	100.0	238,289	10.2

Source: Gartner Dataquest (April 2007)

Samsung Electronics, the No. 2 vendor based on 2006 worldwide semiconductor revenue,  was led by increased sales in DRAM, NOR Flash, PSRAM and CMOS Image Sensors. Offsetting this strength, NAND Flash revenue, which contributed to 2005's revenue growth, declined for Samsung as its market share fell below 50 percent in 2006.

Texas Instruments was supported by strong growth in both its analog and DSP products lines in 2006. While its analog growth overall was successful, it was driven by high performance analog, which grew 33 percent compared to 2005. 3G wireless products grew 50 percent in spite of an inventory correction in the Japanese market.

Driven by strong DRAM growth in 2006, Hynix and Infineon Technologies (including Qimonda) experienced the strongest growth rates among the top 10 vendors for worldwide semiconductor revenue.

In 2006 AMD acquired ATI to combine ATI’s GPU expertise with AMD’s processor platform.  All of ATI’s revenue is reflected within AMD, contributing to a major jump in market revenue for AMD in 2006.  When comparing AMD and ATI combined results for 2005 against 2006, semiconductor revenues grew by just under 30 percent. 

Additional information on specific market segments and devices is available in the Gartner report "Dataquest Insight: Semiconductor Revenue, Worldwide, 2006." The report provides results for the top 25 vendors in the worldwide market, as well as analysis on the top-tier vendors.

This research is part of the information service provided by Gartner's Semiconductors Worldwide group. This research group examines trends in memory, microcomponents, logic, ASIC, analog, discrete device, RF and optical segments to provide a complete industry picture. Products, suppliers, startups, technologies, regional consumption, applications and emerging technologies are all covered in this broad program. More information on Gartner's semiconductor research can be found on Gartner's Web site at http://www.gartner.com/it/products/research/asset_129176_2395.jsp.

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