Semiconductor market suffers biggest quarterly decline in decade

The global semiconductor market surrendered huge losses during the January to March period of this year, causing the top 10 chip makers to suffer steep declines in sales.

According to market research firm IHS Markit on May 29, worldwide semiconductor revenues during the first quarter fell 12.9 percent from the 120.83 trillion won ($101.2 billion) of last year. This marks the biggest quarterly decline since the second quarter of 2009.

The primary cause was sluggish memory chip market conditions. The market size for memory chips shrank by 25% on-quarter. During the same period, D-RAM sales fell 26.1%, while NAND Flash sales declined by 23.8%.

When excluding memory chips, global chip sales fell an estimated 4.4% year-on-year.

Consequently, companies like Samsung Electronics, SK hynix and Micron that depend largely on memory chips suffered significant losses.

Samsung’s quarterly revenues tumbled 34.6%, marking the largest decline among the top 10 chipmakers. Memory chips account for 84% of Samsung’s semiconductor business.

SK hynix and Micron sales fell 26.3% and 22.5%, respectively.

On the other hand, Intel’s sales remained mostly steady, inching down just 0.3%. The company topped the list of chip makers for a second consecutive quarter after beating Samsung in the final quarter of 2018. Memory chips account for only about 6% of Intel’s revenues.

On the whole, the rankings of the top 10 chipmakers in the world were largely unchanged.

On exception was Germany’s Infineon, which rose three notches to 8th place, owing to solid sales from automobile chips. Its revenues declined 0.3% on-year.