Semiconductor revenue up 22% to USD 419.7 bln in 2017

Worldwide semiconductor revenue rose 22.2 percent to USD 419.7 billion in 2017, according to preliminary results by Gartner. Undersupply helped drive 64 percent revenue growth in the memory market, which accounted for 31 percent of total semiconductor revenue in 2017. The key driver behind the booming memory revenue was higher prices due to a supply shortage. NAND flash prices increased year over year for the first time ever, up 17 percent, while DRAM prices rose 44 percent.

Equipment companies could not absorb these price increases so passed them onto consumers, making everything from PCs to smartphones more expensive in 2017.

Samsung Electronics leads the classification, followed by Intel, SK Hynix, Micron Technology, Qualcomm, Broadcom, Texas Instruments, Toshiba, Western Digital and NXP. However, researchers said the existing rankings may not last long as Samsung’s lead is literally built on sand, in the form of memory silicon. Memory pricing will weaken in 2018, initially for NAND flash and then DRAM in 2019 as China increases its memory production capacity. Researchers then expect Samsung to lose a lot of the revenue gains it has made.

Second-placed Intel grew its revenue 6.7 percent in 2017, driven by 6 percent growth in data centre processor revenue due to demand from cloud and communications service providers. Intel’s PC processor revenue grew more slowly at 1.9 percent, but average PC prices are on the rise again after years of decline following the market’s shift from traditional desktops toward two-in-one and ultra-mobile devices.