Intel increases its share of the chip market in 2011

ANALYST OUTFIT ABI Research has said that the largest semiconductor firms have strengthened their positions over smaller firms this year.

Intel, Samsung and Toshiba, the three biggest semiconductor manufacturers in descending order, control 31.6 per cent of the market, with Intel increasing its market share by two per cent from its 2010 level. ABI Research predicts that the semiconductor market will see a four per cent growth in 2011, which it says won't as good as 2010 but much better than the 'dismal' showing in 2009.

There has been some consolidation in the semiconductor market with Intel having bought Infineon's wireless division and Qualcomm buying Atheros, while Texas Instruments looks set to get hold of National Semiconductor. These acquisitions will have a bearing on near term financial performance.

Peter Cooney, semiconductor practice director at ABI Research said, "These deals will have an impact on quarterly results this year, on the companies' future directions and product strategies, and probably on the division of market share. The strongest, generally, get stronger and competition increases, which forces the smaller suppliers to become more innovative in order to compete."

Cooney's comments suggest that the smaller firms need to come up with some compelling designs if they are to stay in a market, which ABI Research believes will increasingly be dominated by three or four firms. For the big companies, the latest round of consolidation in the industry will only help them cement their positions over smaller outfits.

The semiconductor business has never been easy to get into, and according to ABI Research, it won't be getting any easier soon. µ