You have to pay eternal attention to developments that could become a 10X factor in your business - Andy Grove - Only the Paranoid Survive
CHIP DESIGNERS Qualcomm, Broadcom and Nvidia were the only firms among the 10 largest semiconductor vendors to see revenues increase last year.
Analyst outfit IDC totted up the scores from 120 semiconductor vendors and found that only 17 reported an increase in revenue during a difficult 2012 with total revenue falling 2.2 percent to $295bn. Among the stars of the show was third placed Qualcomm, which saw a 34 percent increase in revenues in 2012, along with Broadcom and Nvidia.
Intel, which had a stellar 2011, saw its full-year 2012 revenues fall by three percent to $50bn, which is not bad considering its heavy reliance on PC sales. However IDC's report shows that it wasn't just chip vendors that rely on PCs that saw revenues fall.
Texas Instruments, ST Microelectronics and Renesas, all firms that focus on embedded processors used in industrial applications, reported declines in revenue, while DRAM manufacturers from Samsung through Hynix and Micron all saw revenues tumble.
Michael Palma, research manager for Semiconductors at IDC said, "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.
"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."
Qualcomm's increase in revenues is not particularly surprising given its prominent position in the telecoms market, especially with baseband radio chips, but it is perhaps Nvidia that deserves the most recognition for turning its business around. Nvidia's Tegra system on chip (SoC) line has in just three generations become a viable competitor to designs from firms such as Qualcomm, Texas Instruments and Samsung, and the firm's upcoming Tegra 4i chip will be one of the first SoCs to deliver software defined radio to smartphones, eliminating the need for a baseband chip.
IDC forecast that the semiconductor industry will grow by three to four percent in 2013, which should wipe out most of the losses from 2012. µ
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