NEWS

Gartner: Worldwide Semiconductor Revenue Grew 22.2 per cent in 2017

STAMFORD, CONN — The worldwide semiconductor revenue totalled $419.7 billion in 2017, a 22.2 per cent increase from 2016, according to preliminary results by Gartner, Inc. Undersupply helped drive 64 per cent revenue growth in the memory market, which accounted for 31 per cent of total semiconductor revenue in 2017.

‘The largest memory supplier, Samsung Electronics, gained the most market share and took the No. 1 position from Intel — the first time Intel has been toppled since 1992,’ said Andrew Norwood, research vice president at Gartner. ‘Memory accounted for more than two-thirds of all semiconductor revenue growth in 2017, and became the largest semiconductor category.’

The key driver behind the booming memory revenue was higher prices due to a supply shortage. NAND flash prices increased year over year for the first time ever, up 17 per cent, while DRAM prices rose 44 per cent. Equipment companies could not absorb these price increases so passed them onto consumers, making everything from PCs to smartphones more expensive in 2017.

Other major memory vendors, including SK Hynix and Micron Technology, also performed strongly in 2017 and rose in the rankings.

Second-placed Intel grew its revenue 6.7 per cent in 2017, driven by 6 per cent growth in data centre processor revenue due to demand from cloud and communications service providers. Intel’s PC processor revenue grew more slowly at 1.9 per cent, but average PC prices are on the rise again after years of decline following the market’s shift from traditional desktops toward two-in-one and ultramobile devices.

The current rankings may not last long, however. ‘Samsung’s lead is literally built on sand, in the form of memory silicon,’ said Mr Norwood. ‘Memory pricing will weaken in 2018, initially for NAND flash and then DRAM in 2019 as China increases its memory production capacity. We then expect Samsung to lose a lot of the revenue gains it has made.’

www.gartner.com 

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