Gartner: Worldwide semiconductor revenue down 12% in 2019

Intel Optane memory.

New research from Gartner suggests that worldwide semiconductor revenue fell by 12% in 2019 compared to 2018, totalling $419.1 billion. The decline was helped by an oversupply in DRAM and the U.S.-China trade war distorted sales throughout the year creating “additional headwind to revenue growth”. Turmoil in the market also saw Intel regain the number one position in the market replacing Samsung Electronics.

According to Andrew Norwood, Gartner’s research vice president, last year's problems may extend into 2020 as he believes that the current spread of COVID-19 makes “trade wars seem a minor issue in comparison.” Commenting on the matter, Norwood said:

“At this point, the global semiconductor market appears to be headed for another decline in 2020, due to the impact of the coronavirus on semiconductor supply and demand. COVID-19 has distorted supply chain and manufacturing operations across the world and will lead to a drastic drop in consumer and enterprise spending across most areas with a few exceptions. We expect the global semiconductor market to decline 0.9% in 2020, which is down from forecasted growth of 12.5% at the end of 2019.”

The 10 top semiconductor vendors are Intel, Samsung Electronics, SK hynix, Micron Technology, Broadcom, Qualcomm, Texas Instruments, ST Microelectronics, NXP Semiconductors, and Apple. From this list, all but Intel and Apple saw negative growth. While Intel jumped to first place, its growth was only 2.2% but Apple saw a bigger increase of 12.1%, catapulting it from 15th to 10th place in Gartner’s chart.

According to the analyst firm, NAND flash suffered the worst sales in its history last year with revenue declining 26.4% due to heightened levels of inventory at the end of 2018 and low demand at the start of 2019. While the market stabilised in July 2019 weak demand early in the year caused firms to back out of existing fab plans.

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