Intel regains top spot as semiconductor market dips in 2019

Despite a 0.7 percent drop in revenue, Intel climbed to the top of the global semiconductor market in 2019, according to Gartner.

Samsung slid to second due to a 34-percent decline in sales in the memory market.

Overall, global semiconductor revenue decreased 11.9 percent to US$418.3 billion in 2019.

“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 of Gartner.

DRAM revenue declined 37.5 percent due to an oversupply that started at the end of 2018 and lasted throughout 2019. The oversupply was caused by a sudden fall in demand from the hyperscale market. This revealed excessive OEM inventory levels that took the first half of the year to correct.

“Excessive inventory at DRAM vendors in the second half of 2019 pushed pricing lower and resulted in an average selling price decline of 47.4 percent in 2019,” said Norwood.

Gartner expects to see semiconductor market revenue increase after the high inventory clearance to drive up the chip ASP, especially in the memory sector, in 2020.

“The US-China trade war seems to be easing as we move into 2020. However, during 2019 the US added several Chinese companies, including Huawei, to the Entity List restricting the sale of US components. The immediate impact was to push Huawei into looking outside the US 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,” said Norwood.