Intel Rides PC Demand to Top of Semiconductor Market

High demand for PCs using Pentium and Centrino processors helped Intel preserve its ranking at the top of the semiconductor market, which posted record revenue in 2005, according to a report from analyst firm Gartner.

Rival chip maker Advanced Micro Devices (AMD) grew its portion of the microprocessor sector by 50 percent in 2005, but that effort won it only a 12 percent share, worth US$3.8 billion, according to Gartner analyst Richard Gordon. Intel’s comparatively stodgy 13 percent growth led to an 86 percent market share worth $27.5 billion.

“It’s a bit counterintuitive; a lot of people are looking at AMD’s success in the market and thinking Intel is having a bad year, but they still have 86 percent market share for compute microprocessors,” Gordon said.

An Intel spokesman declined to comment on the rankings, citing the company’s quiet period before it announces first-quarter earnings next week.

Overall, the worldwide market for semiconductors was $235 billion in 2005, an increase of 5.7 percent from the previous year and enough to break the record $223 billion set in 2000.

Much of that growth came from demand for commodity memory chips such as dynamic RAM and static RAM.

Consumers lined up to buy cellular phones and MP3 music players, driving dramatic growth for memory chips and helping Samsung Electronics maintain the second-largest market share. MP3 is a file format for storing compressed audio data.

The most popular technology in this segment was NAND flash, which rose 71 percent from 2004, to $12 billion.

Hynix Semiconductor rode the wave of NAND demand, reaching the top-10 list for the first time by posting annual revenue growth of 23.1 percent, nearly double the rate of giants such as Intel (12.6 percent) and Samsung (12.7 percent).

Still, Hynix lags behind the leaders with 2005 revenue of $5.7 billion compared to Intel’s $34.6 billion, Samsung’s $18.3 billion and Texas Instruments’ $10.1 billion.

Other fast-growing segments of the semiconductor market included CMOS image sensors, which are used in digital cameras, rising 28 percent, consumer ASICs used in digital audio players (14 percent) and wireless ASICs used in cell phones (9 percent). ASIC means application specific integrated circuit.

Geographically, the greatest source of industry growth was the Asia/Pacific region (including China, Taiwan, Korea and Singapore), which produced 44.5 percent of worldwide revenue and also grew the fastest, rising 11 percent from last year.

The Europe, Middle East and Africa region grew 4 percent, followed by the Americas with 1 percent and Japan with a scant 0.2 percent.

-Ben Ames, IDG News Service

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