Samsung Electronics increased its lead as the No. 1 semiconductor vendor due to the booming DRAM market in 2018, according to Gartner. However, the memory chip giant is likely to slip to second position in 2019.

As high as 88% of Samsung's revenues 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 Andrew Norwood, research VP at Gartner.

Worldwide semiconductor revenues totaled US$474.6 billion in 2018, a 12.5% increase from 2017, Gartner disclosed. Growth was weaker than the 21.9% on-year increase in 2017, due to memory growth slowing to 24.9% in 2018 from 61.8% a year earlier.

"Despite slowing growth, the memory market was still the largest semiconductor market, accounting for 34.3% of revenue," Norwood continued. "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."

Intel's semiconductor revenues grew by 12.9% compared with 2017, despite delays in the introduction of 10nm manufacturing process and a constrained low-end CPU supply situation in the second half of 2018, Gartner said. SK Hynix experienced the strongest growth among the top-10 worldwide semiconductor vendors with a 37.4% surge in 2018.

In addition, Gartner indicated that the second-largest category - application-specific standard products (ASSP) - saw growth of only 5.1% 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 revenues decline. Leading vendors in these areas, including Qualcomm and MediaTek, are aggressively expanding into adjacent markets with stronger prospects for growth, including automotive and 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, Gartner believes.

By: DocMemory
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