Intel has retain its number one spot posting annual revenue of $31.3 billion for 2006, according to analyst Gartner Inc.

Overall, the market is set to grow 11.3 per cent to $261.4 billion. Intel's sinking results in this rising tide will cause its market share to sag from 14.7 per cent in 2005 to 12 per cent. The company was only able to record its fifteenth straight year as a market leader because it had banked such a large lead on smaller rivals like Samsung Electronics (with 7.9 per cent market share) and Texas Instruments Inc (4.5 per cent).

Samsung strengthened its position as the industry's second-biggest vendor by selling more DRAM, static RAM (SRAM) and NAND flash chips than any other company.

Samsung will grow 12.4 per cent to reach revenues of $20.6 billion, followed by Texas Instruments growing 17.4 per cent to $11.9 billion and Infineon Technologies AG growing 29 per cent to reach $10.6 billion, Gartner said. The bottom half of the top ten were all predicted to record revenue of single-digit billions, including STMicroelectronics, Toshiba, Renesas Technology, Hynix Semiconductor, AMD and Freescale Semiconductor.

The semiconductor industry will grow more slowly in 2007, likely rising by a high single-digit percentage compared to its 11.3 per cent rise in 2006, Gartner said.