Semiconductor Industry Continues Upward Trend IHS Markit
The semiconductor industry continued its upward trend in
the third quarter of 2017, notching 12 percent sequential growth with strength
across all application markets, according to IHS Markit. Global revenue totaled
$113.9 billion, up from $101.7 billion in the second quarter of 2017.
As memory prices remain high and the wireless market
continues to see strong demand through the fourth quarter, 2017 is shaping up
to be a record-breaking year for the semiconductor industry. IHS Markit
projects that semiconductor revenue will reach a record-high $428.9 billion in
2017, representing a year-over-year growth rate of 21 percent.
All application end markets posted sequential growth over
the prior quarter, with wireless communications and data processing categories
leading the pack.
Revenue from wireless applications grew faster
sequentially in the third quarter of 2017 than any of the other high-level
application markets. Semiconductor revenue from wireless applications was a
record high $34.8 billion in the third quarter, representing nearly 31 percent
of the total semiconductor market. IHS Markit anticipates an even bigger fourth
quarter for wireless applications, projecting $37.5 billion in revenue "” and
more than $131 billion for the full-year 2017.
As the wireless market evolves, this growth can be
attributed to a number of factors. "More complex and comprehensive smartphone
systems on a chip are supporting applications such as augmented reality and
computational photography," said Brad Shaffer, senior analyst for wireless
semiconductors and applications at IHS Markit. "Premium smartphones have
increasing amounts of memory and storage. The radio frequency content in these
smartphones has also grown considerably over the past few product generations,
with many high-end smartphones now supporting gigabit LTE mobile broadband
The memory markets proved once again to be the driving
force and highest-growing segment for semiconductors in the third quarter of
2017. "The DRAM industry had another record quarter with $19.8 billion in
revenue, exceeding the prior record by more than $3 billion," said Mike Howard,
director for DRAM memory and storage research at IHS Markit. "Prices and
shipments were up during the quarter as strong demand for mobile and server
DRAM continued to propel the market."
The NAND industry had another record quarter as well,
growing 12.9 percent in the third quarter of 2017, with total revenue reaching
$14.2 billion. "Pricing was flat in the quarter, as seasonally strong demand
driven by the mobile and solid-state drive segments was able to offset moderate
shipment growth," said Walter Coon, director for NAND flash technology research
at IHS Markit. "The market is expected to soften exiting 2017 and into early
next year, as the industry transition to 3D NAND technology continues to
progress and the market enters a traditionally slower demand period."
Samsung officially passed Intel to become the number-one
semiconductor supplier in the world in the third quarter of 2017, growing 14.9
percent sequentially. Intel now comes in at number two, with SK Hynix securing
the third rank in terms of semiconductor revenue for the third quarter.
Among the top 20 semiconductor suppliers, Apple and
Advanced Micro Devices (AMD) achieved the highest revenue growth quarter over
quarter by 46.6 percent and 34.3 percent, respectively.
There was a good deal of market share movement within the
top 10 suppliers throughout the third quarter as well. In terms of
semiconductor revenue, Qualcomm surpassed Broadcom Limited to secure the
number-five spot, while nVidia made its way into the top 10 ranking for the
first time ever. At this time last year, the top five semiconductor companies
controlled 40 percent market share of the entire industry. The top five gained
4.2 percent more market share this year over last year, while comprising three
memory companies instead of the previous two.