According to preliminary data published by Gartner, worldwide semiconductor revenue totaled $339.8 billion in 2014, a 7.9% increase from 2013 revenue of $315 billion. The top 25 semiconductor vendors’ combined revenue increased 11.7%, which was more than the overall industry’s growth. The top 25 vendors accounted for 72.1% of total market revenue, up from 69.7% in 2013. “As a group, DRAM vendors outperformed the rest of the semiconductor industry. This follows the trend seen in 2013 due to a booming DRAM market that saw revenue increase 31.7% during 2014 as the undersupply and stable pricing continued”, said Andrew Norwood, research vice president at Gartner. “In contrast to 2013, which saw revenue decline in key device categories, including ASIC, discretes and microcomponents, all device categories saw positive growth in 2014, but none could match the growth of the memory market, which grew 16.9% in 2014. Excluding memory revenue, growth for the remainder of the market reached 5.4%, but this is much better than 2013 growth of 0.8 percent for non-memory revenue”.
Intel saw a return to growth in 2014, following two years of revenue decline, with 4.6% growth. The company is on pace to reach its goal of 40 million tablet processors in 2014, although these processors are being shipped at significantly discounted prices with incentives. Intel has maintained the No. 1 market share position for the 23rd consecutive year, capturing 15% of the 2014 semiconductor market, down slightly from its peak of 16.5% in 2011.
“In 2014, we saw a return to production growth in the traditional PC sector, after a 10.1% decline in 2013”, said Norwood. “The smartphone market continued to perform well, with production growth of around 34%, down slightly from 39.5% in 2013, although there was a distinct shift to utility and basic smartphones away from premium handsets. Tablet production, however, experienced a sharp slowdown from previous year”. “DRAM revenues will hit $46.0 billion in 2014, an all-time high surpassing the previous record set back in 1995”, continued Norwood. “However, in terms of the overall share of the semiconductor market, DRAM accounted for 13.5% in 2014, half of the 27.9% share it held back in 1995”.
There was significantly more merger and acquisition activity among the major vendors in 2014 than the previous year. Among the most significant deals was Avago Technologies’ acquisition of LSI, propelling the company into the top 25 semiconductor vendors for the first time. MStar Semiconductor was merged with MediaTek after a prolonged merger, and ON Semiconductor acquired Aptina Imaging. Meanwhile, Infineon Technologies’ bid for International Rectifier has yet to be completed.
