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Worldwide Semiconductor Market Contracted 2.2% in 2012 to $295 Billion – IDC Expects 3-4% Revenue Growth in 2013

  Worldwide Semiconductor Market Contracted 2.2% in 2012 to $295 Billion – IDC
  Expects 3-4% Revenue Growth in 2013

Business Wire

SAN MATEO, Calif. -- May 22, 2013

Worldwide semiconductor revenues decreased by 2.2% year over year to $295
billion in 2012, according to the latest version of the International Data
Corporation (IDC) Semiconductor Application Forecaster (SAF). The industry
witnessed a slowdown during the second half of 2012 on weak consumer spending
across PCs, mobile phones, and digital televisions (DTV), as well as in the
Industrial and other market segments. The European economic crises and a
slowdown in China also had an impact on global demand while the lackluster
launch of Windows 8 failed to stimulate PC sales and turn the tide. Meanwhile,
competitive suppliers from China continued to pressure average selling prices,
dragging down overall revenue growth. IDC expects the semiconductor market to
return to growth in 2013 with revenues forecast to increase by 3.5% this year.

IDC's SAF tracks more than 120 semiconductor companies. Most companies saw
their revenues decline during the year, including eight of the top ten
companies. Only 17 companies, with revenues of a billion or more, grew at a
rate above 5% last year. Among the 25 largest companies covered in the SAF,
only seven had positive top-line growth, including: Qualcomm, Broadcom, NXP,
NVIDIA, MediaTek, Apple, and Sharp Electronics. AllWinner, a tablet
application processor supplier, was the fastest growing company in 2012.

The largest semiconductor company, Intel, saw its revenues decline to $50.0
billion in 2012, down 3% from 2011 largely due to weak PC demand, and minimal
traction in tablets and smartphones. Samsung Electronics, the second largest
supplier, saw revenues drop 6% on weak DTV demand, loss of market share at
Apple, and volatile memory prices. Meanwhile, Qualcomm, the largest fabless
semiconductor supplier, ranked third last year as revenues grew 34% to $13.2
billion due to its leadership in modem technology and success of its
Snapdragon application processor in smartphones. Texas instruments, the number
four supplier, saw revenues decline by 6% due to falling analog, DSP, and MPU
revenues and the company's exit from its wireless business. Rounding out the
top 5, Toshiba revenues were off by 13% from the previous year due to
declining revenues for its analog, ASSP, and memory products. Renesas, Hynix,
Broadcom, STMicroelectronics, and Micron filled out the top 10 spots. From
this group of companies, only Broadcom saw revenues grow last year. Combined,
the top 10 vendors represented 52% of worldwide semiconductor revenues,
declining 3% when compared to 2011. The top 25 semiconductor firms brought in
$206 billion, declining 3% year over year.

Within the semiconductor device types, performance was mixed. Sensors and
actuators grew the fastest at 11% year over year, but with 2012 revenues of $7
billion the segment only accounted for 2% of industry revenues. ASSPs, the
largest category of semiconductors with 32% of the overall opportunity, grew
by 4% for the year on strength in media, graphics, and application processors
and RF and mixed-signal ASSPs. Finally, optoelectronics, with 6% of total
semiconductor revenues, grew 5%, mostly from image sensors and LEDs. Revenues
for microcomponents declined by 5%, driven by lower revenues for MPUs and
MCUs. Memory, representing 17% of the industry, saw its revenues decline by
10%. Finally, Analog, which accounted for 7% of revenues last year, declined
by 7%.

"Beyond the slowdown in end-market demand, the challenge for semiconductor
companies is to zero in on their key value propositions. Whether that is in
modem or connectivity technologies, sensors, mixed-signal processing, or power
management, there are areas of the market showing strong potential. However,
competing in crowded segments with little differentiation has contributed to
the slowdown in semiconductor revenues," said Michael J. Palma, Research
Manager, Semiconductors at IDC, who led the study and compiled the SAF
results. "Large vendors have been going through a process of narrowing their
product portfolios to focus resources on profitable lines where their IP and
experience provide an edge in the market."

"As we mentioned in our Top 10 Predictions for the 2013 worldwide
semiconductor market (IDC document #232832), investment in R&D and capital in
the semiconductor industry remains very high and focused on innovation and
addressing the competitive dynamics of a diverse set of industries that
semiconductors support. In fact, the overall market landscape and reach of
semiconductors continues to expand with the rise of Intelligent Systems and
will play a critical role in the overall health and growth of the market,"
said Mario Morales, Program Vice President for enabling technologies and
semiconductors.

IDC's Semiconductor and Enabling Technologies research team manages the
Worldwide Semiconductor Applications Forecaster database, which is a focal
point for IDC's semiconductor research efforts. This database contains revenue
data collected from more than 120 semiconductor companies and forecasts the
markets to 2017. Revenue for over twelve semiconductor device areas, four
geographic regions, six major vertical markets, and over 90 system devices
markets are also part of the SAF coverage.

About IDC

International Data Corporation (IDC) is the premier global provider of market
intelligence, advisory services, and events for the information technology,
telecommunications, and consumer technology markets. IDC helps IT
professionals, business executives, and the investment community to make
fact-based decisions on technology purchases and business strategy. More than
1,000 IDC analysts provide global, regional, and local expertise on technology
and industry opportunities and trends in over 110 countries. For more than 49
years, IDC has provided strategic insights to help our clients achieve their
key business objectives. IDC is a subsidiary of IDG, the world's leading
technology media, research, and events company. You can learn more about IDC
by visiting www.idc.com.

All product and company names may be trademarks or registered trademarks of
their respective holders.

Contact:

IDC
Michael Palma, 650-350-6246
mpalma@idc.com
or
Michael Shirer, 508-935-4200
press@idc.com