- Memory chip revenue plunged by 31.6 per cent, with DRAM falling 37.2 per cent and NAND flash memory dropping by 24.5 per cent in 2019
- Sony Semiconductor Solutions Corporation and Intel were outstanding performers
Global semiconductor revenue plunged by 11.7 per cent in 2019, shedding $56.6 billion worth of revenue compared to 2018. This, as per a latest Omdia report, represented the worst annual performance for the chip industry since Omdia began gathering data in 2001. It was also the most notable drop since 2009 when revenues had fallen by 10.9 per cent.
“Top semiconductor suppliers that are heavily dependent on the memory segment bore the brunt of the market plunge, with Samsung Electronics, SK Hynix, and Micron Technology all posting revenue declines in about 30 per cent range,” read the report.
Revenue created in the memory chip market plunged by 31.6 per cent, with DRAM falling 37.2 per cent and NAND flash memory dropping by 24.5 per cent—despite a stabilisation in pricing in the fourth quarter. The wireless communications segment saw a decline of 13.3 per cent during the year.
This, as per the report was the largest decline in more than 10 years. Mobile sales declined for the year as consumers delayed phone purchases while waiting for 5G performance-enabled smartphones. The artificial-intelligence chipmakers suffered a seven per cent revenue decline during the year. This was also the largest decrease in more than a decade.
Intel surpassed Samsung to become number one
Despite eight out of the top ten chip suppliers facing a decline in revenue figures, Intel managed to attain 1.3 per cent growth in 2019. The company surpassed Samsung to become the world’s top semiconductor supplier in 2019.
“Intel’s performance in 2019 represents a triumph for the company’s diversified business model. Five years ago, Intel began to refocus its business strategy into various critical products and end markets. This strategy has paid off in 2019, allowing Intel to avoid dependence on a single product or application market and enabling the company to mitigate the effects of the massive market downturn of 2019,” said Ron Ellwanger, senior analyst, semiconductor manufacturing, for Omdia.
Intel’s Mobileye division focused on autonomous driving achieved the most impressive growth, with revenue rising by 25.9 per cent during the year. However, the larger Data Center Group (DCG) and Internet of Things Group (IOTG), as per the report, were the real drivers of the company’s revenue expansion for the year. DCG, which accounts for 33 per cent of company revenue, attained 2.1 per cent revenue growth in 2019. IOTG, which represents five per cent of Intel’s sales, grew by an impressive 10.6 per cent during the year.
Sony grew by 30.9 per cent
Another standout performer in 2019, as per the report, was Sony Semiconductor Solutions Corporation. It attained a 30.9 per cent growth during the year. The massive increase in revenue allowed the company to rise four places from the 17th rank in 2018.
“Sony’s performance was built on its leadership position in CMOS image sensor chips, which are used as cameras in a wide variety of devices—including smartphones,” Ellwanger said. “With smartphones increasingly employing multi-camera configurations, demand for Sony’s consumer-quality sensors is soaring.”
Triple-camera smartphones became the most popular type of model in the market in the fourth quarter, exceeding dual-camera devices for the first time, according to Omdia. Models with three cameras accounted for 31 per cent of global smartphone shipments during the final three months of 2019, exceeding the percentage of single-camera models. This helped drive a 22.9 per cent increase for the global CMOS sensor market in 2019.
