Top semiconductor suppliers in Greater China face slowing growth
Jul 18, 2007
Total semiconductor shipments in Greater China - consisting of Mainland China, Hong Kong and Taiwan - totaled $66.3 billion in 2006, up 11.8 percent from $USD59.3 billion in 2005, according to iSuppli Corp.'s Greater China Competitive Landscaping Tool (CLT).
As predicted last year, semiconductors shipped to China/Hong Kong increased to about $44.8 billion in 2006, up 15.8 percent from $38.6 billion in 2005.
"These robust double-digit increases demonstrate China's capability to compensate for moderate semiconductor market growth globally," said Byron Wu, director of China research for iSuppli Corp. "However, because Taiwanese Original Design Manufacturers (ODMs) continue to transfer production to Mainland China, semiconductor shipments to Taiwan have experienced flat growth in recent years."
In 2006, semiconductor sales in Taiwan reached $21.5 billion, representing just 4.2 percent growth compared to 2005. In iSuppli's ranking of the Top-10 manufacturers of 2006, some leading suppliers suffered negative or slow growth. This is not a good trend for the industry as a whole.
Top-10 semiconductor suppliers in Greater China
Intel Corp. in 2006 was the leading semiconductor supplier in the Greater China market with shipment revenue of $USD8.4 billion. Texas Instruments Inc. (TI) ranked second in revenue last year, with sales about half those of Intel. However, TI recorded 32.2 percent growth in 2006 as some of its largest handset customers expanded production in the region.
Riding dramatic growth in the memory business, Hynix became the third leading semiconductor supplier in the region. Samsung Electronics Co. Ltd. took fourth place with a slight drop in Greater China shipments during 2006.
Meanwhile, NXP Semiconductors saw its revenue decline slightly because of its internal restructuring in 2006. STMicroelectronics and Toshiba Corp. in 2006 each achieved about 10 percent growth in the Greater China market. Advanced Micro Devices Inc.'s (AMD's) dramatic rise was driven by the company's acquisition of ATI Technologies. In comparison with previous years, Qualcomm Inc.'s growth rate lessened as its CDMA mobile communications business advanced at a slower pace in 2006.
Table 1 presents iSuppli's ranking of the Top-10 semiconductor suppliers in Greater China in 2006.
Top-10 semiconductor suppliers in China/Hong Kong
In contrast with 2005, there was a major shift in China/Hong Kong rankings during 2006. Intel still held onto its leading position. However, its ratio of shipments-to-revenue declined by almost 13.3 percent as a result of fierce competition with AMD.
TI maintained strong growth momentum in China/Hong Kong thanks to its capable product line and effective sales strategies. In fact, TI has been the second largest semiconductor supplier in the China/Hong Kong market for the last three consecutive years.
Hynix Semiconductor Inc. climbed into the No. 3 spot due to significant DRAM shipment growth. STMicroelectronics, Toshiba Corp. and Freescale Inc. continued their healthy growth rates in China and were ranked fourth, fifth and seventh respectively. The market share of both Samsung Electronics and NXP in the region declined somewhat in 2006.
Table 2 presents iSuppli's ranking of the Top-10 semiconductor suppliers in the China/Hong Kong area in 2006.
Top-10 semiconductor suppliers in Taiwan
It's not surprising that the top semiconductor rankings in Taiwan differ from China/Hong Kong in light of the regions' varying market focuses.
Taiwan concentrates mainly on data-processing system design and manufacturing, while China/Hong Kong focuses on consumer electronics and wireless equipment. Several semiconductor suppliers with Central Processing Unit (CPU), DRAM and graphic-card product lines, including Intel, Samsung, Powerchip, Hynix, Nvidia and AMD, are among the Top- 10 semiconductor suppliers in Taiwan.
TI, STMicroelectronics and NXP also are present in the ranking because their analog and power products are needed for data-processing applications.
Broadcom Corp. is an exception. It is neither a Top-10 supplier in Greater China or China/Hong Kong. Nonetheless, it ranked seventh in Taiwan because of its popular products for data communications.
Table 3 presents iSuppli's ranking of the Top-10 semiconductor suppliers in Taiwan in 2006.
For more information on iSuppli's China Research, please visit: http://www.isuppli.com/catalog/L2_CHIN.asp