- Gartner noted that the worldwide semiconductor revenue declined by 12 per cent in 2019
- Intel, as per Gartner, reclaimed the top spot in global semiconductor market
Worldwide semiconductor revenue totalled $419.1 billion in 2019. These figures represent a downfall of 12 per cent from 2018, according to final results published by Gartner, Inc.
“At this point, the global semiconductor market appears to be headed for another decline in 2020, due to the impact of the coronavirus on semiconductor supply and demand. COVID-19 has distorted supply chain and manufacturing operations across the world and will lead to a drastic drop in consumer and enterprise spending across most areas with a few exceptions. We expect the global semiconductor market to decline 0.9 per cent in 2020, which is down from forecasted growth of 12.5 per cent at the end of 2019,” noted Andrew Norwood, research vice president at Gartner.
Optoelectronics recorded the best performance
Optoelectronics, as per the report, recorded the best performance of any device category. This was due to the increasing number of cameras in smartphones.
Performance in other device categories was mixed as analogue products declined 5.1 per cent in 2019 and the optoelectronics segment grew 6.6 per cent in 2019. Analog components, which normally closely track the overall semiconductor market, experienced a decline due to weak end-equipment markets, especially industrial and legacy automotive.
“Oversupply in the DRAM market helped push the overall memory market down 32.7 per cent 2019. The memory market accounted for 26.1 per cent of semiconductor sales in 2019 and was the worst-performing device segment. The US-China trade war distorted sales throughout the year and was an additional headwind to revenue growth for the overall global semiconductor market. During 2019, this brewing trade war seemed the most imminent danger to the world economy, but with the current spread of the COVID-19 virus, trade wars seem a minor issue in comparison,” added Norwood.
NAND flash suffered its worst sales
Within the memory segment, NAND flash suffered its worst sales contraction in its history with 2019 revenue declining 26.4 per cent due to elevated levels of inventory at the end of 2018 and sluggish demand in the first half of 2019. Weak demand from smartphone and hyperscale cloud service providers drove down prices and forced nearly all vendors to pull back on existing fab plans or, in some cases, cut wafer starts to levels below 2018.
The NAND market began to stabilise in July 2019 when a power outage in the fabs jointly owned by KIOXIA and Western Digital acted as a catalyst to reduce vendor inventories and prompted prices to increase from unsustainable lower levels.
“Intel regained the first position in the market as the downturn in the memory market negatively impacted many of the top vendors, including Samsung Electronics, the number one vendor by revenue in 2018 and 2017.
