SAN FRANCISCO Intel Corp., which announced major job cuts Tuesday (Sept. 5), experienced a dramatic decline in semiconductor revenue during the second quarter and posted its lowest quarterly market share in more than four years, according to market research firm iSuppli Corp.
Intel's second quarter revenue dropped by 12.8 percent sequentially in the second quarter and its share of the global chip market shrink to 11.4 percent, down from 13.2 percent in the first quarter, according to iSuppli (El Segundo, Calif.). It is the lowest market share Intel has held since iSuppli began tracking quarterly semiconductor market shares in 2002, the firm said.
"Following such an impressive 2005, this represents a major reversal of fortune for Intel," said Dale Ford, iSuppli's vice president of market intelligence services. "However, Intel's recent actions show it understands the need to improve its efficiency and sharpen its focus on its core business of microprocessors and integrated circuits for computing systems."
Intel said Tuesday it would eliminate 10,500 jobs through layoffs and attrition by mid-2007.
Intel was one of only two companies in iSuppli's top-20 semiconductor rankings to experience a year-over-year decline in revenues during the second quarter, the firm said. Only Japan's Matsushita Electric Industrial Co. Ltd. experienced a similar decline in revenue, according to iSuppli.
Total semiconductor market revenue grew sequentially by 1.2 percent, according to iSuppli's market share research of more than 100 chip suppliers. Revenue increased to $62.3 billion in the second quarter, compared to $61.5 billion in the first, the firm said.
The semiconductor market experienced an 11.4 percent year-over-year revenue increase in the second quarter, while the first half of 2006 registered growth of 9.4 percent compared to the same period in 2005, iSuppli said. The firm expects growth in the second half of the year to weaken compared to the first half.
South Korea's Hynix Semiconductor Inc., which achieved 39.7 percent year-to-year revenue growth in the second quarter, moved into the top 10 worldwide semiconductor rankings in the second quarter, entering the charts at No. 7, iSuppli said. Hynix' year-to-year growth was the strongest among top 10 suppliers, iSuppli said.
Texas Instruments Inc.'s revenue increased 24.1 percent during the second quarter, iSuppli said.
Other fast-growing companies among the top 20 semiconductor suppliers were Micron Technology Inc., with 23.3 percent growth; Advanced Micro Devices Inc. (AMD), with a rise of 52.6 percent; Qualcomm Inc., up 47.9 percent, Broadcom Corp. with a 55.6 percent increase and IBM Microelectronics Inc with a 38.2 percent expansion in revenue, iSuppli said.
Infineon Technologies AG of Germany and its memory chip spin off Qimonda AG in the second quarter captured the No. 11 and No. 13 rankings, respectively, with Qimonda's revenues only $5 million lower than No. 12 Micron in the second quarter, iSuppli said.
The Infineon/Qimonda combination helped European-headquartered companies deliver the strongest regional performance in the semiconductor industry in the first half of 2006, with sequential growth in the first and second quarters of 3.5 percent and 4.7 percent, respectively, according to iSuppli.
Asia/Pacific-based companies posted a 6.6 percent decline in the first quarter and then rebounding with 5 percent growth in the second quarter, the firm said. Despite the mixed results, Asia/Pacific companies increased their share of semiconductor market revenue to 17.1 percent in the second quarter of 2006, iSuppli said. In the second quarter of 2003, Asia/Pacific's share was only 11.9 percent, the firm said.
Japanese companies saw their overall semiconductor market share decline to 22.6 percent in the second quarter of 2006, down from 27.1 percent in the second quarter of 2003, iSuppli said.
American semiconductor companies held 47.0 percent market share in the second quarter, a decline of 1.1 percent sequentially, iSuppli said.
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