Worldwide semiconductor revenue totalled $339.8bn in 2014, a 7.9 per cent increase from 2013’s revenues of $315bn, according to Gartner. The top 25 semiconductor vendors’ combined revenue increased by 11.7 per cent, which was more than the overall industry’s growth. The top 25 vendors accounted for 72.1 per cent of total market revenue, up from 69.7 per cent in 2013.

Andrew Norwood, research vice president at Gartner (pictured) said: “As a group, dynamic random-access memory (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 per cent during 2014 as the undersupply and stable pricing continued. 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 per cent in 2014. Excluding memory revenue, growth for the remainder of the market reached 5.4 per cent, but this is much better than 2013 growth of 0.8 per cent for non-memory revenue.”

Intel Datacenter Group still stable
Intel saw a return to growth in 2014, following two years of revenue decline, with 4.6 per cent growth (see Table 1). The company reorganized itself into five new business units in 2014, with the Datacenter Group continuing to be the most the stable unit for the company. Intel 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. On the PC front, Intel continued to gain market share from AMD, and Gartner expects volume increases for both Intel’s notebook and desktop platforms compared with 2013. Intel has maintained the No. 1 market share position for the 23^rd consecutive year, capturing 15.0 per cent of the 2014 semiconductor market, down slightly from its peak of 16.5 per cent in 2011.

Table 1. Top 10 Semiconductor Vendors by Revenue, Worldwide, 2014 (Millions of Dollars)

Source: Gartner (December 2014)

“In 2014, we saw a return to production growth in the traditional PC sector, after a 10.1 per cent decline in 2013,” said Norwood. “Tablet production, however, experienced a sharp slowdown from last year.”

“DRAM revenues will hit $46.0 billion in 2014, an all-time high surpassing the previous record set back in 1995.” said Norwood. “However, in terms of the overall share of the semiconductor market, DRAM accounted for 13.5 per cent in 2014, half of the 27.9 per cent share it held back in 1995.”

SK Hynix and Micron Technology benefited the most from the strong memory market, with the strongest growth of the top 10 vendors. SK Hynix saw a second strong year of revenue growth propelled by the booming DRAM market. DRAM accounts for about 80 per cent of the company’s revenue.

Micron Technology moved up one place in the rankings in 2014 due to its 41 per cent growth. Its acquisition of Elpida Memory in 2013 helped make it one of the fastest-growth semiconductor vendors in the top 25.

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. After adjusting for M&A activity, the top 25 vendors grew at 10.0 per cent, meaning the rest of the market saw a more respectable growth of 2.6 per cent.

Additional information is provided in the Gartner report “Market Share Analysis: Preliminary Total Semiconductor Revenue, Worldwide, 2014.” The report provides the worldwide market share rankings for the top 25 semiconductor vendors in 2014. The report is available on Gartner’s web site athttp://www.gartner.com/document/2950517.