Gartner Says Worldwide Semiconductor Revenue Grew 12.5 Percent in 2018

STAMFORD, Conn. -- April 11, 2019 -- Worldwide semiconductor revenue totaled $474.6 billion in 2018, a 12.5 percent increase from 2017, according to final results by Gartner, Inc. 2018 growth was weaker than the previous year (21.9 percent) due to memory growth slowing to 24.9 percent versus 2017 growth of 61.8 percent.

“Despite slowing growth, the memory market was still the largest semiconductor market, accounting for 34.3 percent of revenue,” said Andrew Norwood, research vice president at Gartner. “This was driven by increases in average selling prices (ASPs) for DRAM for the majority of 2018. However, ASPs began to decline in the fourth quarter and this will continue through most of 2019 due to oversupply conditions.”

Samsung Electronics increased its lead as the No. 1 semiconductor vendor due to the booming DRAM market. Currently, 88 percent of the company’s revenue comes from memory sales. “Samsung’s lead is literally built on sand, in the form of memory silicon, and those shifting sands in 2019 will almost certainly lead to Samsung losing its No. 1 semiconductor crown to Intel in 2019,” said Mr. Norwood.

Intel’s semiconductor revenue grew by 12.9 percent compared with 2017, despite delays in the introduction of 10 nm manufacturing process and a constrained low-end CPU supply situation in the second half of 2018. SK hynix experienced the strongest growth among the top 10 worldwide semiconductor vendors with a 37.4 percent increase in 2018 (see Table 1).

Table 1. Top 10 Semiconductor Vendors by Revenue, Worldwide, 2018 (Millions of U.S. Dollars)

2018 Rank	2017 Rank	Vendor	2018 Revenue	2018 Market Share (%)	2017 Revenue	2017-2018 Growth (%)
1	1	Samsung Electronics	73,649	15.5	61,158	20.4
2	2	Intel	66,290	14.0	58,725	12.9
3	3	SK hynix	36,240	7.6	26,370	37.4
4	4	Micron Technology	29,742	6.3	22,895	29.9
5	6	Broadcom	16,261	3.4	15,405	5.6
6	5	Qualcomm	15,375	3.2	16,099	-4.5
7	7	Texas Instruments	14,593	3.1	13,651	6.9
8	11	ST Microelectronics	9,213	1.9	8,021	14.9
9	9	Western Digital	9,078	1.9	9,159	-0.9
10	10	NXP Semiconductors	9,022	1.9	8,746	3.2
		Top-10	279,463	58.8	240,229	16.3
		Others (outside Top 10)	195,168	41.2	181,494	7.5
		Total Market	474,631	100.0	421,723	12.5

Source: Gartner (April 2019)

The second-largest category — application-specific standard products (ASSPs) — saw growth of only 5.1 percent due to a stalling smartphone market combined with a tablet market that continues to decline. Vendors that rely heavily on these end markets to sell application processors, modems and other components in many cases saw semiconductor revenue decline. Leading vendors in these areas, including Qualcomm and MediaTek, are aggressively expanding into adjacent markets with stronger prospects for growth, including automotive and Internet of Things (IoT) applications. However, similar to the maturation of the PC market, a mature smartphone market is likely to continue to be a headwind in 2019 for companies with high exposure.

More detailed analysis is available to Gartner clients in the report "Market Share Analysis: Semiconductors, Worldwide, 2018."

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