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December 20, 2012

Semiconductor Revenue Falls by Almost 5 Percent in 2012, Says ABI Research

By Rory Lidstone, TMCnet Contributing Writer

According to ABI Research (News - Alert), 2012 has not been the year for semiconductors. The research firm recently released its latest information on the mobile device semiconductors market which states that worldwide semiconductor revenue is expect to fall by almost 5 percent by the end of the year to just over $200 billion.

Meanwhile, 15 of the top 20 semiconductor vendors — including Intel, Samsung, Texas Instruments (News - Alert) and STMicroelectronics — will see declines in their semiconductor product revenue in 2012 compared to 2011.

That said, some companies have managed to beat the odds to outperform the overall market; these successes were largely buoyed by the successful smartphone market, according to ABI Research.

"Revenues for platform and wireless connectivity IC used in smartphones grew almost 30 percent year-on-year from 2011 to 2012 and this has helped companies such as Qualcomm (News - Alert) and Broadcom grow in a lackluster year for the overall semiconductor market," said Peter Cooney semiconductor practice director for ABI Research, in a statement.

But those companies that have enjoyed revenue growth will not be able to keep it up for long as integration in platform and connectivity ICs will be a negative factor. With so many high-profile companies leaving the market, though, there’s still potential for revenue growth for the remaining dominant suppliers.

As such, 13 percent revenue growth is expected for the market in 2013, but this figure will then slow to single-figure growth going forward.

"In the past few years we have seen many once dominant players leave the mobile handset IC market," added Cooney. "Freescale and Texas Instruments both exited to focus on more industrial markets and STMicroelectronics recently announced that it will pull out of its joint venture with Ericsson despite increasing design wins for ST-Ericsson's (News - Alert) Thor and NovaThor products. The exit of these high profile players is indicative of the strong competition in the handset IC market, the moves by OEMs such as Samsung and Huawei (News - Alert) to vertically integrate shows that competition can only increase."

Earlier in December, ABI Research released its quarterly market data for the LBS application and advertising revenue markets, which identified location-based retail applications, advertising and emerging markets as key areas of revenue growth.

Around that time, the research firm also recognized Jasper Wireless as the leading M2M connected device platform provider.

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Edited by Braden Becker
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