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Gartner Says Worldwide Semiconductor Revenue Grew 1.5 Percent in 2016

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Intel Retains Position as No.1 Semiconductor Vendor for 25th Consecutive Year

Worldwide semiconductor revenue totaled $339.7 billion in 2016, a 1.5 percent increase from 2015 revenue of $334.8 billion, according to preliminary results by Gartner, Inc. (see Table 1). The top 25 semiconductor vendors’ combined revenue increased by 7.9 percent compared with 2015, and accounted for 75.9 percent of the market.

“After a poor start to the year, characterized by inventory burn-off, the second half of 2016 was fueled by inventory replenishment and improved demand and pricing,” said Adriana Blanco, senior research analyst at Gartner. “Overall, semiconductor revenue for the second half of the year was much stronger than the first half, reflecting the strengthening memory market and continued inventory replenishment, as well as inventory build for both the iPhone 7 and the holiday season.”

Intel remained in the top spot, reaching a quarter of a century as the No. 1 semiconductor vendor, with 15.9 percent market share. Samsung Electronics maintained the No. 2 position for the 15th year with 11.8 percent of the market. Broadcom Ltd. was the best performer in the top 25, climbing 11 places to reach the fifth position after the Avago Technologies acquisition of Broadcom Corporation.

Table 1. Top 10 Semiconductor Vendors by Revenue, Worldwide, 2016 (Millions of Dollars)

2016 Rank

2015 Rank

Vendor

2016 Revenue

2016 Market Share (%)

2015 Revenue

2015-2016 Growth (%)

1

1

Intel

53,996

15.9

51,690

4.5

2

2

Samsung Electronics

40,143

11.8

37,852

6.1

3

4

Qualcomm

15,351

4.5

16,079

-4.5

4

3

SK hynix

14,267

4.2

16,374

-12.9

5

16

Broadcom Ltd. (formerly Avago)

13,149

3.9

5,216

152.1

6

5

Micron Technology

12,585

3.7

13,816

-8.9

7

6

Texas Instruments

11,776

3.5

11,533

2.1

8

7

Toshiba

10,051

3.0

9,162

9.7

9

12

NXP

9,170

2.7

6,543

40.1

10

11

MediaTek

8,697

2.6

6,704

29.7

 

Others

150,499

44.2

159,799

-5.8

   

Total

339,684

100

334,768

1.5

Source: Gartner (January 2017)

“When it comes to end-application markets, wireless and compute are the largest end markets for semiconductors but showed very different growth patterns in 2016,” said Ms. Blanco. “Wireless revenue grew 9.6 percent and continued to be driven by smartphones and the exposure to the memory markets, where conditions were much more favorable than the overall memory market, in part because of strong bit content growth, and also improved performance of other device categories, including ASICs and nonoptical sensors. Compute revenue, on the other hand, declined 8.3 percent, as it continues to be dragged down by a sluggish PC and tablet market and exposure to the memory segment.”

The memory market in 2016 started with the DRAM and NAND markets in oversupply and pricing declining. By the middle of the year, both markets moved into undersupply, and pricing increased strongly. The NAND flash market, in particular, had a turbulent start in 2016, plagued by oversupply conditions, but deep shortages and increasing prices during the second half of 2016 spurred growth.

In terms of macroeconomic factors during 2016, the euro was relatively stable compared with the U.S. dollar, whereas the yen strengthened significantly. The U.K. Brexit decision in June 2016 had no significant effect on the global semiconductor market, although equipment demand in the U.K. was hit by higher pricing as a result of a weakening sterling.

Gartner clients can get more information in “Market Share Analysis: Semiconductor Revenue, Worldwide, Preliminary 2016 Estimates.”

About Gartner

Gartner, Inc. (NYSE: IT) is the world’s leading information technology research and advisory company. Gartner delivers the technology-related insight necessary for its clients to make the right decisions, every day. From CIOs and senior information technology (IT) leaders in corporations and government agencies, to business leaders in high-tech and telecom enterprises and professional services firms, to supply chain professionals, digital marketing professionals and technology investors, Gartner is the valuable partner to clients in more than 10,000 distinct enterprises. Gartner works with clients to research, analyze and interpret the business of IT within the context of their individual roles. Gartner is headquartered in Stamford, Connecticut, U.S.A., and has almost 9,000 associates, including 1,900 research analysts and consultants, operating in more than 90 countries. For more information, visit www.gartner.com.

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Gartner Gartner, Inc. (NYSE: IT) is the world's leading information technology research and advisory company. The company delivers the technology-related insight necessary for its clients to make the right decisions, every day. From CIOs and senior IT leaders in corporations and government agencies, to business leaders in high-tech and telecom enterprises and professional services firms, to technology investors, Gartner is the valuable partner to clients in approximately 10,000 distinct enterprises worldwide. Through the resources of Gartner Research, Gartner Executive Programs, Gartner Consulting and Gartner Events, Gartner works with every client to research, analyze and interpret the business of IT within the context of their individual role. Founded in 1979, Gartner is headquartered in Stamford, Connecticut, USA, and has 8,300 associates, including more than 1,800 research analysts and consultants, and clients in more than 90 countries. For more information, visit www.gartner.com.

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