Despite a ‘soft market’ in 2005, Intel, Samsung and Texas Instruments remained on top of the worldwide semiconductor sector, and increased sales faster than the market average.

Intel hung onto the number one spot and recorded the highest growth rate among the top 10 suppliers, with turnover up by 13 per cent to $35.5bn, an increase from $31.4bn in 2004. It also extended its lead over the other players with its market share rising to 15 per cent, compared with 13.8 per cent in 2004. This is good news for Intel, which for the first time lost noticeable ground in the PC/server space to AMD during 2005.

Dale Ford, vice-president of market intelligence at iSuppli, said: “Intel’s gains were driven by growth in the microprocessor market, which grew by 16.1 per cent in 2005. However, it did lose 2.9 per cent of its market share during the year to AMD.”

The backdrop to this market growth was one of slower sales, with the 2005 global semiconductor market only growing by 3.6 per cent to $237.1bn. This compared poorly with the healthy 23.8 per cent sales increase in 2004, but not everyone agreed that 2005 was a ‘soft market’.

Raj Suman, European product marketing director at distributor, Avnet, said: “In terms of chips sales, 2005 was strong, especially from a pan-European perspective. In Western Europe things were a bit soft, but we have seen a lot of growth in emerging markets. We expect this to remain the case for the next few years. On the chip front, we see strong growth for 2006. There are other things happening that will help fuel sales, such as the arrival of Microsoft Vista, which will require systems to have faster chips and more memory.”

Samsung, which achieved second place in 2005, recorded the second-best revenue growth of the top 10 in 2005, up by 9.2 per cent to $17.2bn. The company’s good fortunes relied on the strength of the memory market, which accounted for almost 85 per cent of its revenues.

“In a DRam market that declined by 6.2 per cent in 2005, Samsung managed to contain its revenue losses, and suffered only a one per cent decrease in revenue,” Ford said.

Only four companies among the top 20 managed double-digit growth last year: Intel, Hynix, IBM Microelectronics and Broadcom. The two that experienced double-digit declines were NEC Electronics and Matsushita Electric.

martin_lynch@vnu.co.uk