DRAM price crash forces global semiconductor revenues down 12 per cent - but Intel retakes top spot

Memory price crash batters Samsung, Hynix and Micron, enabling Intel to retake top spot as world's biggest semiconductor company

Intel has regained its position as the world's largest semiconductor company by revenue as a result of the DRAM price crash that battered revenues at Samsung, SK Hynix and Micron Technology.

While the company reported 2019 revenues down marginally - by 0.7 per cent - to $65.8 billion, Samsung revenues fell by 29.1 per cent to $52.2 billion, SK Hynix in third registered revenues down by 38 per cent and Micron Technology suffered a 32.6 per cent revenue drop to $20.1 billion to claim fourth spot.

All that is according to Gartner in its preliminary Worldwide Semiconductor Market Share Analysis 2019.

Samsung had claimed top spot as the world's largest semiconductor from Intel for two years on the back of strong demand and rising prices for DRAM in smartphones and graphics cards. Indeed, average selling prices in the DRAM market fell by 47.4 per cent, according to Gartner, while flash memory prices dropped by 23 per cent.

Table (bordered)

Intel

$65.79bn

15.7%

$66.29bn

-0.7%

Samsung Electronics

$52.21bn

12.5%

$73.65bn

-29.1%

SK Hynix

$22.48bn

5.4%

$36.24bn

-38.0%

Micron Technology

$20.1bn

4.8%

$29.74bn

-32.6%

Broadcom

$15.29bn

3.7%

$16.26bn

-6.0%

Qualcomm

$13.54bn

3.2%

$15.38bn

-12.0%

Texas Instruments

$13.2bn

3.2%

$14.59bn

-9.5%

ST Microelectronics

$9bn

2.2%

$9.21bn

-2.1%

Kioxia/Toshiba Memory

$8.8bn

2.1%

$8.53bn

3.1%

NXP

$8.75bn

2.1%

$9.02bn

-3.1%

Market total

$418.3bn

$474.63bn

-11.9%

^{Source: Gartner}

Until 2016, Intel had hogged the top spot for 23 consecutive years.

Only one company in the top ten registered revenue growth - Kioxia, formerly Toshiba Memory, which saw revenues grow by 3.1 per cent to $8.8 billion, to claim ninth.

"The memory market, which accounted for 26.7% of semiconductor sales in 2019, experienced a 31.5% decline in revenue in 2019," said Andrew Norwood, research vice president at Gartner.

"Within memory, DRAM revenue declined 37.5 per cent due to an oversupply that started at the end of 2018 and lasted throughout 2019. The oversupply was caused by a sudden fall in demand from the ‘hyperscale' market.

"This revealed excessive OEM inventory levels that took the first half of the year to correct. Excessive inventory at DRAM vendors in the second half of 2019 pushed pricing lower and resulted in an average selling price (ASP) decline of 47.4 per cent in 2019."

Norwood added that, following the memory price crash, the market ought to return to growth in 2020 following a year of "inventory clearance".