Worldwide semiconductor market slumps in 2008

More bad news on the way as Gartner releases gloomy predictions for 2009

Worldwide semiconductor sales have been hit by the recession

There was bad news for the semiconductor industry today, after Gartner reported a revenue drop of around five per cent last year, and larger losses to come this year.

The analyst firm's latest market share figures show that worldwide semiconductor revenue reached $255bn (£173bn) in 2008, a decrease of $14.5bn (£9.8bn) from 2007.

Gartner surveyed worldwide and regional revenue for more than 275 semiconductor suppliers in 65 product categories and eight major market categories.

Unsurprisingly, Intel held the top spot in terms of market share, as it has done for the past 16 years, increasing its share to 13.3 per cent in 2008, despite a decline in revenue of 0.5 per cent after spinning off its NOR Flash memory business.

Qualcomm posted the highest growth, at 15.3 per cent, but Samsung saw revenue slump 15 per cent in 2008. Gartner said that the poor performance of Samsung's main DRAM and Nand Flash lines was down to excess supply in the market during 2008.

"While sales held up fairly well in the first half of 2008, in the third quarter the industry started to soften as the economy slowed, and by the fourth quarter sales were deteriorating quickly, causing revenue growth to go into negative territory," said Peter Middleton, principal research analyst at Gartner.

"With the market heavily impacted by the recession, we can expect considerable market consolidation going forward."