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Worldwide semiconductor sales were slightly lower in 2015

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January 7, 2016

New numbers published by Gartner this morning reveal that worldwide semiconductor sales dropped slightly in 2015, as chipmakers were hit by weak currencies, lower personal computer shipments and supply gluts in a few key markets.

Gartner’s take on last year's semiconductor market shows overall revenues slipping 1.9 percent to $333.7 billion.

This compares to 2014’s 7.9 percent growth. What caused the drop? Gartner research director Sergis Mushell said a strengthening US dollar significantly impacted the total semiconductor market in 2015.

This pushed the prices of some components and a few finished products in local currencies, prompting buyers to delay those purchases or buy cheaper products.

Supply gluts in key markets were also a factor. The NAND market was undermined by elevated supply bit growth that resulted in an aggressive pricing environment.

The result was a meagre 4.1 percent revenue growth. Mushell added that 3D NAND commercialisation was modest and limited to just one vendor-- Samsung.

However, overall investment in NAND flash and 3D technology was aggressive, he said. Presumably this will mean some ongoing price pressure and perhaps oversupply in near future.

By comparison, if you look at the DRAM market, where revenues slid 2.4 percent last year, compared to a 32 percent growth in 2014.

Gartner placed the blame for this squarely on weak PC demand. Things would have been worse, if Micron had not been transitioning to 20nm technology, leading to negative bit growth at the DRAM heavyweight.

Overall, that weakness in key device markets meant only optoelectronics, non-optical sensors, analog and ASIC saw some revenue growth, compared to 2014 where all sectors showed better growth.

That same weakness in PC demand hit Intel, which saw overall revenues slip 1.2 percent to $51.7 billion. It still managed to maintain its top spot in the industry, and actually increased its market share by half a percentage point to 15.5 percent.

Samsung saw revenues grow about 11.8 percent to $38.9 billion, while SK Hynix saw 3.1 percent growth to $16.5 billion.

Qualcomm's revenues slump 17.5 percent to $15.9 billion, while Micron’s revenue slipped 11.2 percent to $14.4 billion.

Top marks go to South Korea, though we imagine they're taking a rather cautious view of this year's prospects right now. It will be interesting to see what 2016 brings, but the way financial markets have been doing so far this week is a bit concerning to some analysts.

Source: Gartner.

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