Intel resumed its position as the leading chip vendor as the downturn in the memory market negatively impacted many of the top vendors, including Samsung Electronics, Gartner’s top vendor by revenue in 2018 and 2017.

“The memory market, which accounted for 26.7 percent of semiconductor sales in 2019, experienced a 31.5 percent decline in revenue in 2019,” said Andrew Norwood, research vice president at Gartner, in a statement.

The DRAM segment declined 37.5 percent due to an oversupply caused by a fall in data center demand. Excess inventory resulted in decline in the average selling price of 47.7 percent in 2019, according to Norwood.

Intel was not hit as much as Samsung by the decline in the memory market but had its own problems with a constrained manufacturing capability and processor supply and its decision to sell its cellular modem business to Apple (Report: Apple in talks to buy Intel modem business).

Top 10 Semiconductor Vendors by Revenue, Worldwide, 2019 (Millions of U.S. Dollars). Source: Gartner.

As a result Intel’s semiconductor revenue declined 0.7 percent in 2019. Samsung’s memory revenue, which accounted for 82 percent of its sales, declined 34 percent in 2019.

NAND flash experienced a milder 2019 downturn than the overall memory market, with a revenue decline of 23.1 percent due to elevated levels of inventory at the end of 2018 and sluggish demand in the first half of 2019. Prices started to rise in the 2H19. Gartner expects the recovery in the NAND flash memory market to continue in 2020 with low growth in the bit supply and strong demand from solid-state drives and the ramp up of 5G smartphones.

Next: Analog and optoelectronics

Gartner reckons analog semiconductors were a declining market in 2019 – down on an annual basis by 5.4 percent while optoelectronics grow by 2.4 percent.

Norwood said Gartner expects the semiconductor market revenue to increase in 2020 driven by rising averaging selling prices after the inventory clearance of 2019.

Norwood touched on the US-China trade war; one of the influences that inhibited end markets in 2019. “The U.S.-China trade war seems to be easing as we move into 2020. However, during 2019 the U.S. added several Chinese companies, including Huawei, to the Entity List restricting the sale of U.S. components. The immediate impact was to push Huawei into looking outside the U.S. for alternative silicon suppliers, with wholly owned HiSilicon at the top of the list as well as alternative suppliers based in Japan, Taiwan, South Korea and China. This will be an area to watch in 2020.”

Related links and articles:

News articles:

Report: Apple in talks to buy Intel modem business

Chip market weakness sends top-ranked vendors down 18%

Gartner: Memory carried 2018 global chip market to growth

Gartner increases 2018 global chip forecast

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