Worldwide semiconductor revenue is on track for a 23-percent increase in 2004, to $218 billion in revenue, however the industry has experienced a significant slowdown in the second half of the year, according to preliminary results by Gartner, Inc.
"The sudden downturn in the semiconductor market in the final months of 2004 has been caused by vendor sensitivity to an incremental buildup of channel inventory," said Gerald Van Hoy, industry analyst for Gartner's Semiconductors Worldwide group. "In a break from the past, semiconductor vendors have reacted quickly and decisively by throttling back output. They are determined to avoid the type of market crash that occurred in 2001 following a huge inventory buildup."
Intel remained the No. 1 vendor based on worldwide semiconductor revenue (see Table 1) for the 13th consecutive year, based on its strength in compute microprocessor sales. Samsung Electronics increased revenue by 49 percent. The company benefited from success in the dynamic random-access memory (DRAM) and NAND flash memory markets. Samsung Electronics also is a market leader in liquid crystal displays, and driver chips, and it is competing well in microprocessors for MP3 players, digital cameras and cellular phones.