El Segundo, Calif. — The worldwide semiconductor market grew by 9.2 percent in 2014, slightly below the growth projection of 9.4 percent, led by sales of memory devices, according to IHS Technology. The fourth quarter, alone, showed 9.7 percent year-over-year growth. This translated into global revenue of $354.5 billion in 2014, up from $324.7 billion in 2013.
“The nearly double-digit percentage increase follows solid growth of 6.6 percent in 2013, a decline of 2.6 percent in 2012 and a marginal increase of 1.3 percent in 2011,” said IHS. “The performance in 2014 represents the highest rate of annual growth since the 33 percent boom of 2010.”
Growth was driven by healthy demand across most of the component segments with all of the major component markets seeing positive growth in 2014, according to the report. Five of the seven major component segments saw improved growth compared to 2013, and 73 percent of the 128 categories and subcategories tracked by IHS achieved growth in 2014. The combined categories that did not grow in 2014 accounted for only 8.1 percent of the total semiconductor market, said IHS.
Industrial electronics took the lead in application markets with 17.8 percent growth, followed by data processing (13.7%) and automotive (10%). All application markets experienced growth with the exception of consumer electronics, according to IHS.
Out of more than 300 companies monitored by IHS nearly 64 percent achieved positive revenue growth in 2014. The report also reveals that the total combined revenues of all companies that reported declines accounted for roughly 15 percent of total semiconductor revenues in 2014.
The biggest growth driver by component category was memory led by DRAMs. “However, memory market growth declined by a little more than 10 percent compared to the boom year of 2013 with over 28 percent growth in that year. Growth in sensors & actuators came in only slightly lower than 2013,” according to the report. Other growth areas included digital signal processors, microprocessors, and microcontrollers.
The big winners were Intel, which maintained its ranking as the largest semiconductor supplier, followed by Samsung Electronics and Qualcomm, respectively. Big movers, thanks to acquisitions, include MediaTek which moved into the top 10 thanks to the acquisition of MStar, and Avago, which moved up to No. 14, thanks to its purchase of LSI.
IHS forecasts continued growth into 2015.
“While 2014 marked a peak year for semiconductor revenue growth, the health of both the semiconductor supply base and end-market demand, position the industry for another year of strong growth in 2015,” said Dale Ford, vice president and chief analyst at IHS Technology, in a statement.
“Overall semiconductor revenue growth will exceed 5 percent in 2015, and many component categories and markets will see improved growth over 2014. The more moderate 2015 growth is due primarily to more modest increases in the memory and microcomponent categories. The dominant share of semiconductor markets will continue to see vibrant growth in 2015,” he further stated.
Early 2015 sales reports from the Semiconductor Industry Association (SIA) indicate that the global sales of semiconductors continue to climb. SIA reported that worldwide sales of semiconductors reached $27.8 billion in February 2015, an increase of 6.7 percent from February 2014 when sales were $26.0 billion. However, global sales from February 2015 were 2.7 percent lower than the January 2015 total of $28.5 billion, which reflect seasonal trends, said SIA.
"The global semiconductor industry maintained momentum in February, posting its 22nd straight month of year-to-year growth despite macroeconomic headwinds," said John Neuffer, president and CEO, Semiconductor Industry Association, in a statement. "Sales of DRAM and analog products were particularly strong, notching double-digit growth over last February, and the Americas market achieved its largest year-to-year sales increase in 12 months."
The SIA also expects the industry’s continued success to be based on free trade under the Trade Promotion Authority.
"SIA strongly supports Trade Promotion Authority (TPA) and applauds the introduction of this bipartisan legislation. TPA paves the way for free trade by empowering U.S. negotiators to reach final trade agreements consistent with negotiating objectives laid out by Congress. Free trade is especially critical to the U.S. semiconductor industry, which designs and manufactures the chips that enable virtually all electronics. Our industry relies on a global ecosystem of materials and equipment suppliers, technology providers, services, R&D, and customers, so we depend on open access to international markets, said Neuffer, in a statement.
He continued: "In 2014, U.S. semiconductor company sales totaled $173 billion, representing over half the global market, and 82 percent of those sales were to customers outside the United States. The U.S. semiconductor industry employs nearly 250,000 people in high-skilled, high-wage jobs in America, and supports over one million additional U.S. jobs. Since most of the U.S. semiconductor industry's customers are abroad, free trade is critical to creating and supporting these U.S. jobs."