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Mon 1 Jan 2007 12:44 PM

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DRAM growth behind semiconductor surge

Intel and Samsung take the number one and two positions again as Gartner report shows DRAM demand is key to semiconductor rise

Worldwide semiconductor revenue climbed by more than 11% last year, creating a market in excess of US$261 billion, according to analyst firm Gartner Dataquest.

The company attributed the healthy year-on-year growth to solid demand for DRAM. "Strong growth in DRAM picked up in 2006 where NAND flash left off the year before," explained Jeremey Donovan, research director at Gartner. "Outside of DRAM, wireless semiconductor sales once again drove strong performance in the industry," he added.

Intel again reclaimed its number one position with a 12% share of the market, although it was one of only two top-10 semiconductor vendors - along with Renesas Technology - to suffer a decline in revenues as sales slipped by just over 9% to US$31 billion.

Gartner claims that until the fourth quarter, Intel lost share as its CPUs in the server and consumer enthusiast segments were ‘inferior' to AMD's in price and performance. It adds that many PC OEMs increased their offerings of AMD-based platforms throughout the year, including Dell, which finally shed its tag as an Intel-only vendor. A savage price battle also saw Intel's revenue eroded with the company more exposed to the issue as a result of being the market's largest vendor. Second-placed Samsung continued to gain share after growing semiconductor sales by 12% year-on-year to US$20.6 billion.

The company now retains a vice-like grip on many areas of the memory market, and holds the number one position in DRAM, SRAM, and the NAND flash markets.

Elsewhere in the semiconductor market, third-placed Texas Instruments grew sales by 17% to US$12 billion while Infineon and STMicroelectronics - which complete the top five - increased sales by 29% and 12% respectively. Note that Germany-based Infineon's haul also includes the contribution of the Qimonda operation that it carved out of its memory products business last May.

Gartner claims the global semiconductor market is still being impacted by inventory concerns, but expects inventory levels to return to normal by the end of March 2007.

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