SAN FRANCISCO No. 1 semiconductor supplier Intel Corp. endured an 11.1 percent revenue decline in 2006 while smaller rival Advanced Micro Devices Inc. (AMD) nearly doubled its sales, according to a final 2006 market share ranking released by market analyst iSuppli Corp. Thursday (March 15).
"For U.S. microprocessor giant Intel, 2006 was the worst of times, as its global semiconductor revenue dropped by 11.1 percent from 2005," said Dale Ford, iSuppli's vice president of market intelligence. "The revenue decline, which was due to Intel's bleak performance in its core PC microprocessor and flash-memory businesses, erased nearly all of the company's sales gains from its strong year in 2005. Intel's 2006 revenue of $31.5 billion was less than half a percentage point higher than its sales in 2004."
As the result of a 91.6 percent increase in revenuedue in part to the mid-year acquisition of ATI Technologies Inc.AMD surged from 15th to eighth on iSuppli's list of the top 25 chip suppliers for 2006, iSuppli (El Segundo, Calif.) said.
"For Intel's smaller U.S. rival, AMD, 2006 was the best of times as it achieved a whopping 91.6 percent increase in revenue for the year, partly due to a major acquisition, but also because of strong gains in microprocessor market share," Ford said.
Overall, global semiconductor industry revenue rose by 9.3 percent to reach $260.2 billion, up from $237.98 billion in 2005, according to iSuppli. The firm had said in December that its preliminary results indicated that the global chip market had increased by 9 percent in 2006.
Intel's microprocessor and flash-memory businesses together accounted for 83 percent of total company revenue in 2006, iSuppli said. Intel's combined microprocessor and flash revenue in 2006 fell to its lowest level since 2003 as Intel faced rising competitive pressure in those markets, according to the firm. The revenue decline resulted in Intel's market share falling to 12.1 percent, its lowest level since before 2000, iSuppli said.
iSuppli released its final top 25 chip supplier rankings one day after fellow market researcher IC Insights (Scottsdale, Ariz.). The lists are similar, but contain notable differences. For one thing, IC Insights ranks foundries like Taiwan Semiconductor Manufacturing Co. and United Microelectronics Corp. among the top chip companies, while iSuppli excludes them. IC Insights ranked Hynix Semiconductor Inc. ahead of Renesas Technology Corp., while iSuppli said Renesas bested Hynix in 2006. IC Insights ranked AMD 13th, while iSuppli ranked AMD eighth.
AMD in 2006 gained PC microprocessor market share at Intel's expense, iSuppli said. AMD's PC microprocessor revenue rose by 35.5 percent in 2006 and its market share in that product segment increased to 16.1 percent, up 5 percentage points from 11.1 percent in 2005, iSuppli said.
iSuppli said 2006 was a banner year for the leading pure-play memory chip suppliers. Hynix of South Korea leapt to the seventh-place position in 2006, up from 11th in 2005 as its revenue surged by an impressive 41.5 percent, iSuppli said.. Hynix's memory revenue growth of $2.3 billion surpassed the $1.8 billion memory sales increase posted by memory-chip leader Samsung Electronics Co. Ltd. in 2006, according to iSuppli. Germany's Qimonda AG, a newly created pure-play memory company formed from the spin-off of Infineon AG's memory business, increased its revenue by 54.9 percent in 2006, said iSuppli.
The fastest growing memory supplier in 2006and the quickest-expanding supplier among the world's top-25 chip sellerswas Japan's Elpida Memory Inc., according to iSuppli. Elpida's revenue nearly doubled in 2006, rising by 98.6 percent from 2005 and pushing the company to 19th among chip suppliers from 28th in 2005, iSuppli said.
Other notable increases were posted by Taiwan's ProMos Technologies Inc., Nanya Technology Corp. and Powerchip Semiconductor Corp. as well as by U.S.-based Spansion LLC, iSuppli said.
Overall, memory IC revenue increased by 22.7 percent in 2006, iSuppli said.
Texas Instruments Inc. in 2006 achieved the strongest growth among the top-five semiconductor suppliers with a 17.3 percent increase in revenue for the year, iSuppli said. The company benefited from strong sales of baseband chips, as well as digital signal processors, according to the research firm.
Beyond AMD, Hynix, Elpida, and Spansion, three other companies among the top-25 achieved growth of more than 24 percent in 2006: Qualcomm Inc., Broadcom Corp. and Nvidia Corp., iSuppli said.
Hynix's and AMD's ascension to the first-tier semiconductor ranks in 2006 displaced two companies that had been among the top 10 since at least the early 1990sInfineon and NEC Electronics Corp. iSuppli said.
See iSuppli's top 25 chip rankings for 2006