Market analysis

The Semiconductor Industry Association announced that worldwide semiconductor sales for 2013 reached US$305.6bn, the industry’s highest-ever annual total and an increase of 4.8% from the 2012 total of US$291.6bn. Global sales for the month of December 2013 reached US$26.6bn, and December sales in the Americas increased 17.3% YoY. Q4'13 global sales of US$79.9bn were 7.7% higher than the total of US$74.2bn from Q4’12. This was due to improved consumer sentiments in the developed markets and an upturn led by Christmas holiday sales which is seasonally a peak for electronics demand globally.

The industry saw strong demand in several product segments during 2013. Logic was the largest semiconductor category by sales, reaching US$85.9bn in 2013, a 5.2% increase compared to 2012. Memory at US$67.0bn and Metal-oxide-semiconductor micro-ICs at US$58.7bn rounded out the top three segments in terms of sales revenue. Memory was the fastest growing segment, increasing 17.6% in 2013. Within memory, DRAM performed well, increasing by 33.3% YoY, while NAND flash experienced strong growth of 8.1%. Other positively performing product segments included Optoelectronic products, which reached US$27.6bn in sales, and Analog, which reached US$40.1bn in sales.1

Samsung Electronics and Apple remained the top semiconductor buyers in 2013, increasing their combined semiconductor demand by 17%, according to Gartner. Samsung and Apple together consumed US$53.7bn of semiconductors in 2013, an increase of US$7.7bn from 2012. The top 10 companies bought US$114bn of semiconductors, accounting for 36% of semiconductor vendors' worldwide revenue in 2013. This was up from US$105.1bn and 35% in 2012.2

Applied Materials generated orders of US$2.29bn, up 9% from the prior quarter led by demand for Silicon Systems group products. Net sales were US$2.19bn, up 10% sequentially. Silicon Systems group (SSG) orders were US$1.57bn, up 13%, with growth in foundry and flash partially offset by decreases in logic and DRAM. Net sales increased 19% to US$1.48bn. Operating income increased to US$314mn or 21.2% of net sales. New order composition was: foundry 60%; flash 27%; logic/other 8%; and DRAM 5%. Display orders of US$79mn were down 31%, while net sales declined slightly to US$159mn. Backlog grew 3% to US$2.44bn including negative adjustments of US$32mn, primarily related to currency adjustments. Backlog composition by segment was: SSG 56%; AGS 27%; Display 12%; and EES 5%.

Qualcomm’s revenue of US$6.62bn, was up 10% YoY and 2% sequentially. Operating income was down 28% YoY to US$1.49bn. Net income of US$1.88bn was down 2% YoY but up 25% sequentially. It was driven by growth in sales of MSMTM chips---213 million units, up 17% YoY and 12% sequentially. Net income was also positively impacted by a US$665mn gain from discontinued operations associated with the sale of all of the operations of Omnitracs division.

  1. SIA, February 2014
  2. Gartner, January 2014
Please click here to access the Data Explorer tool offering additional financial information on these as well as many more companies.
Raman Chitkara
Global leader
Tel: +1 (408) 817 3746