Intel remains No.1 semiconductor giant

8 Dec 2006

Despite what can be described as a difficult year that saw Intel implement a plan to reduce its headcount and lose valuable market share to AMD, the company remains the world’s largest semiconductor vendor with some US$31.2bn revenues reached in 2006.

According to Gartner, although Intel remains the largest semiconductor maker by revenue, it recorded negative growth of -9.5pc between 2005 and 2006. Its arch rival AMD on the other hand recorded a 90.4pc growth rate as revenues reached US$7.4bn.

During the year Intel suffered from price competition and market share loss to AMD. Intel’s worst fears were realised when computer giant Dell entered into a deal with AMD.

Intel employs approximately 5,000 people in Leixlip, Co Kildare, and is regarded as the jewel in the crown of Ireland’s inward investment achievements. In September, workers at the facility received the good news that they were to escape a round of significant job cuts taking place across the world.

Intel remained the No 1 vendor in 2006 in Gartner’s ranking even as its revenue declined 9.5pc. This is the 15th year that Intel has been the top semiconductor vendor.

Until the fourth quarter, Intel lost share as its central processing units (CPUs) in the server and consumer enthusiast segments were inferior to AMD’s in price and performance.

Many PC OEMs increased their offerings of AMD-based platforms with Intel-only stalwart Dell ultimately opening its arms to AMD across mobile, desktop and server product families. Revenue was further eroded by an across-the-board price war, with Intel having more to lose as the larger vendor.

Overall conditions look good for the semiconductor industry as a whole as flash and wireless memory drive demand.

“Strong growth in DRAM picked up in 2006 where NAND flash left off the year before,” said Jeremey Donovan, research director at Gartner. “Outside of DRAM, wireless semiconductor sales once again drove strong performance in the industry.”

The top 10 companies in the global semiconductor market are: Intel (US$34.5bn), Samsung (US$20.6bn), Texas Instruments (US$11.8bn), Infineon (US$10.5bn), STMicroelectronics (US$9.8bn), Toshiba (US$9.8bn), Renesas (US$7.9bn), Hynix (US$7.7bn), AMD (US$7.4bn) and Freescale (US$6bn).

By John Kennedy