Gartner Says Preliminary Worldwide Semiconductor Market Share Shows Mixed Fortunes for Vendors in 2003.

Business Editors

STAMFORD, Conn.--(BUSINESS WIRE)--Dec. 4, 2003

A favorable supply environment driven by increased fab utilization and falling inventory levels led the worldwide semiconductor industry to grow 11.8 percent in 2003, with revenue totaling $175 billion, according to preliminary statistics by Gartner, Inc. In 2002, worldwide semiconductor revenue increased 2 percent.

"Though strong overall, 2003 has been a mixed year for individual semiconductor vendors," said Jeremey Donovan, vice president for Gartner's worldwide semiconductor group. "Companies with greater exposure to commodity markets like flash memory and DRAM were able to outgrow the market. This is a complete reversal of fortune as these companies suffered more than specialty application semiconductor vendors in the 2001-2002 downturn."

Intel remained the No. 1 vendor based on worldwide semiconductor revenue in 2003, with 16 percent of the market (see Table 1). This is the 12th consecutive year that Intel has held the top spot. Samsung was in the second position, followed by Renesas Technology. This is the first time that Renesas Technology, a joint venture between Japanese companies Hitachi and Mitsubishi Electric , is reported in our rankings. In 2003, Hitachi and Mitsubishi were ranked No. 10 and No. 11, respectively.

Table 1
Preliminary Top 10 Worldwide Semiconductor Vendors by Revenue
Estimates
(Millions of U.S. Dollars)

                                    2003    2003   2002    2002  2003-
Company                            Revenue Market Revenue Market 2002
                                           Share          Share Growth
                                            (%)             (%)   (%)
----------------------------------------------------------------------
Intel                              28,050   16.0  25,400   16.2  10.4
Samsung Electronics                10,320    5.9   8,630    5.5  19.6
Renesas Technology                  7,516    4.3      NA     NA    NA
Toshiba                             7,422    4.2   6,455    4.1  15.0
Texas Instruments                   7,400    4.2   6,240    4.0  18.6
STMicroelectronics                  7,100    4.1   6,355    4.1  11.7
Infineon Technologies               6,979    4.0   5,253    3.4  32.9
NEC Electronics                     6,413    3.7   5,691    3.6  12.7
Motorola                            4,700    2.7   4,781    3.1  -1.7
Philips Semiconductors              4,440    2.5   4,361    2.8   1.8
Others                             84,674   48.4  83,424   53.2   1.5
Total Market                      175,014  100.0 156,590  100.0  11.8
----------------------------------------------------------------------

Note: In some cases, Gartner Dataquest's vendor estimates differ from those publicly reported by a company because it is our policy to include or exclude revenue associated with acquired or divested companies or business units for the whole calendar year, regardless of when the acquisition or divestment took place.

Source: Gartner Dataquest (December 2003)

For two years, Samsung's growth was aided by strong NAND flash memory sales. "Samsung had another excellent year with growth nearly twice that of the overall market," Donovan said. "The company made a strategic decision at the start of 2003 to shift production from DRAM to NAND flash to take advantage of stronger average selling prices."

Toshiba grew 15 percent, benefiting from strong NAND flash memory sales. As with several other Japanese semiconductor vendors, Toshiba was also aided by the strength of the yen relative to a weakened dollar.

By growing in excess of the industry average, Texas Instruments was a standout among vendors that are more focused on specialty applications as opposed to commodity device markets. The company continued to maintain a strong position in the wireless semiconductor business. NEC Electronics, which separated from its parent in July, had a mixed year with weakness in sales of devices to the consumer game console segment being offset by strong sales to the wireless handset and automotive segments.

Overall, the big three European semiconductor vendors had mixed performances. Infineon Technologies had the strongest growth with 33 percent, due to a combination of product growth in wireless and in DRAM, as well as favorable exchange rates. Driven by wireless and digital-consumer products, STMicroelectronics grew 12 percent. Philips struggled during the first half of 2003, but the company began seeing strong sequential growth during the third quarter in its digital-consumer semiconductor segment.

Additional information is available in the Gartner Alert "Preliminary Semiconductor Share Rankings Reflect Solid Recovery in 2003." This Alert provides preliminary rankings for the top 25 companies worldwide as well as the top 10 vendors in the Americas, EMEA, Asia/Pacific and Japan.

This research is produced by Gartner's Semiconductors Worldwide group. This research group combines memory, microcomponents, logic, ASIC, analog, discrete device, RF and optical segments into a complete industry picture. Products, suppliers, startups, technologies, regional consumption, applications and emerging technologies are all covered in this broad program. More information about Gartner Dataquest semiconductor programs and reports can be found in the Gartner Semiconductor Focus Area at http://www.gartner.com/research/focus_areas/asset_48268.jsp. To subscribe to this service, please call 408-468-8000. Reports can be purchased on the Internet at www.gartner.com.

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