The continuing migration of the electronics industry to China shaped the fortunes of some of the major semiconductor suppliers in 2005, with certain top companies that made gains in the Asia/Pacific region also achieving success on the worldwide stage.
Asia/Pacific continued to expand its share of worldwide semiconductor consumption in 2005, with revenues from semiconductors sold in the region rising by 7 per cent in 2005. In contrast, the worldwide semiconductor market grew by only 3.6 per cent in 2005, and the region with the next-fastest expansion rate after Asia/Pacific-Europe/Middle East/ Asia (EMEA)-rose by a scant 1.8 per cent for the year. Nearly half of all semiconductor sales worldwide in 2005 took place in Asia/Pacific, with the region accounting for 44.5 per cent of global chip revenue for the year.
The Asia/Pacific region played a key role in the success of global semiconductor leader Intel Corp. and number three chipmaker Texas Instruments Inc. (TI) in 2005. Both of these US-based companies achieved sales increases in Asia/Pacific that outperformed the average revenue growth in the region, with Intel’s revenues growing by 25.4 per cent and TI’s sales expanding by 10.4 per cent. The two companies posted the best performances among the top 10 semiconductor suppliers in the Asia/Pacific region in 2005.
Interestingly, Samsung Electronics Co. Ltd., the world’s second largest supplier of chips, actually saw its revenues decline in its home Asia/Pacific region. Samsung’s growth in 2005 was driven by revenue expansion that significantly outpaced the average in the other three regions: the Americas, EMEA and Japan.
The top three worldwide semiconductor suppliers, Intel, Samsung, and Texas Instruments, maintained their global dominance in 2005 by commanding market-leading positions in all worldwide regions. These three companies ranked among the leading 10 in all four regions.
Infineon Technologies AG, STMicroelectronics NV and Freescale Semiconductor Inc. achieved top-10 rankings in three regions in 2005, with Japan being the only market where they did not make the top 10 cut. Advanced Micro Devices (AMD), Hynix, Toshiba and Renesas achieved top-20 positions in three of the four regional markets in 2005.
The rest of the top 20 semiconductor suppliers are heavily dependant on their performance in only one or two regional markets for their success. Two of the top 20 semiconductor suppliers do not make the top 10 ranking in any of the regional markets.
Significant differences exist in the regional revenue percentages for the top 10 semiconductor suppliers.
Notably, the Japanese companies were the most reliant on their own domestic market for their revenues among the top 10 worldwide semiconductor suppliers. This is illustrated by the large share of revenues that Japanese suppliers Toshiba, Renesas and NEC Electronics derived from their domestic market. Between 56.5 per cent and 63 per cent of the semiconductor revenues for Toshiba, Renesas and NEC came from shipments to the Japan market. In contrast, Samsung and Texas Instruments were the only companies in the global top 10 that derived 10 per cent or more of their revenue from shipments to Japan in 2005.
European chip suppliers Infineon, STMicroelectronics and Philips Semiconductor earn a large share of their revenues from shipments to their domestic market. However, STMicroelectronics and Philips garner a much larger portion of their sales from the Asia/Pacific market than they do from Europe.
Samsung and Micron Technology Inc of the United States led regional revenue growth in EMEA with revenues expanding by 20.5 per cent and 8.6 per cent respectively.
In the Americas region, Hynix Semiconductor Inc. of South Korea and Samsung significantly outperformed the overall regional semiconductor revenue growth. Hynix saw its Americas revenues increase by a dramatic 73.1 per cent and Samsung expanded its revenues by 11.7 per cent.
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