EL SEGUNDO, CA -- Intel Corp. is expected to solidify its position as the world’s leading semiconductor supplier, posting the highest revenue growth among the top 10 chip makers for the year, according to a preliminary ranking from iSuppli Corp.   The research firm raised its forecast for global chip revenue in 2005 to $237.3 billion, up 4.4% from $227.3 billion in 2004.
The data are based on research of the 100 leading semiconductor suppliers.

The outlook is higher than the previous forecast. In September iSuppli forecast 2.4% growth in 2005.

Worldwide semiconductor growth exceeded expectations in the third quarter, rising 4.5% from a year ago and 9.3% sequentially.

Based on projected sales for the fourth quarter, iSuppli estimates that fourth-quarter revenue will grow 5.3 % sequentially.

Intel is expected to generate semiconductor revenue of $35.8 billion in 2005, up 14.4% from $31.3 billion in 2005, according to iSuppli. This represents nearly six points more revenue growth than the next-fastest growing company among the top-five suppliers, Texas Instruments Inc..

“Much attention has been focused on the market share gains that Advanced Micro Devices has made in the PC microprocessor market at the expense of Intel. However, Intel’s overall semiconductor revenue growth actually is expected to surpass AMD’s projected rise of 11.8% this year,” said Dale Ford, vice president, market intelligence.

Samsung Electronics and TI, the No. 2 and 3 chip suppliers, are expected to solidify their positions this year. Samsung's revenue is projected to increase to $17.1 billion, up 8.5%. TI is set to increase chip sales to $11.1 billion, up 8.6%.

Fourth ranked Toshiba is expected to grow 7%, passing STMicroelectronics and Infineon Technologies in the rankings. Infineon has announced plans to spin off its memory business into a separate company in 2006. Based on 2005 revenues, Infineon would be ranked number 15 if its memory revenues were excluded.

This means that five companies are expected to compete for ranks eight, nine and 10 in 2006: Philips Semiconductor, AMD, NEC Electronics, Freescale and Hynix. The difference in market share between No. 8 Philips and 12th-place Hynix is estimated to be just 0.11 of a point in 2005.

Based on expected revenue growth of 2.4% in 2005, Freescale Semiconductor is expected to drop out of the top 10 and end the year ranked in 11th place, just ahead of Hynix. With impressive growth of 18.5%, Hynix is set to be one of only three companies in the top 25 to achieve revenue growth of more than 15% in 2005.

IBM Microelectronics’ chip revenue is expected to rise by 30%, enabling it to move back into the top 20, up from 21st place in 2004. nVidia’s forecasted growth of 22.8% will propel it to number 24, up from the 29th rank in 2004.

With ATI Technologies capturing the 25th position in 2005, a total of three fabless semiconductor companies, including Qualcomm and nVidia, will be among the top 25 for the first time.

Seven companies among the top 25 are expected to experience revenue declines in 2005. Hardest hit will be NEC, with a 12.2% decline; Infineon, with an 8.7% drop; Sanyo Electric, with an 8.5% decline and Renesas Technology Corp. with a 7% decrease.

Japan Loses Ground
Of the 20 Japanese semiconductor makers tracked by iSuppli market share research on a quarterly basis, 12 are projected to see declining revenues in 2005.

A review of historical quarterly market share data reveals a steady decline in the combined market share of Japanese companies beginning in the second quarter of 2003. Between the second quarter of 2003 and the fourth quarter of 2005, the combined market share of Japanese companies is projected to fall to 23.4%, down from 27.3%, a contraction of nearly four points.

In contrast, the combined annual market shares of companies headquartered in the Asia/Pacific region grew by 3.6 points during this same period. This is a source of serious concern in the Japanese semiconductor industry and is spurring a close evaluation of its future.

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