The global semiconductor industry posted record sales totaling US$335.8bn in 2014, an increase of 9.9% from the 2013 total of US$305.6bn. Global sales for the month of December 2014 reached US$29.1bn, marking the strongest December ever recorded. Fourth-quarter global sales of US$87.4bn were 9.3% higher than the total of US$79.9bn from Q4’13.1
Several semiconductor product segments stood out in 2014. Logic was the largest semiconductor category by sales, reaching US$91.6bn in 2014, a 6.6% increase compared to 2013. Memory (US$79.2bn) and micro-ICs (US$62.1bn)—a category that includes microprocessors—rounded out the top three segments in terms of sales revenue. Memory was the fastest growing segment, increasing 18.2% in 2014. Within memory, DRAM performed particularly well, increasing by 34.7% year over year. Other fast-growing product segments included power transistors, which reached US$11.9bn in sales for a 16.1% annual increase; discretes (US$20.2bn), an increase of 10.8%; and analog (US$44.4bn), a 10.6% increase.1
Annual sales increased in all four regional markets for the first time since 2010. The Americas market showed particular strength, with sales increasing by 12.7% in 2014. Sales were also up in Asia Pacific (11.4%), Europe (7.4%) and Japan (0.1%), marking the first time annual sales in Japan increased since 2010.1
The top 25 semiconductor vendors' combined revenue increased 11.7%, which was more than the overall industry's growth. The top 25 vendors accounted for 72.1% of total market revenue, up from 69.7% in 2013.2
The US and China have agreed to expand the Information Technology Agreement (ITA), a key trade pact that promotes fair and open trade by providing for duty-free treatment of certain information and communications technology (ICT) products, including semiconductors. The product scope of an expanded ITA includes next-generation semiconductors, static converters and inductors, and an array of technology products including medical devices, GPS devices, software media, ICT testing instruments, and others. US negotiators sought expanded coverage for new and innovative semiconductor products, including multi-component semiconductors (MCOs).
As the trend toward “smart” products continues, demand for advanced semiconductor products like MCOs has been growing consistently in the past few years and will continue to do so in the future.3
Intel is on pace to reach its goal of 40 million tablet processors in 2014, although these processors are being shipped at significantly discounted prices and with incentives. On the PC front, Intel continued to gain market share from AMD, and volume increases for both Intel's notebook and desktop platforms compared with 2013 is expected. Intel has maintained the No. 1 market share position for the 23rd consecutive year, capturing 15.0% of the 2014 semiconductor market, down slightly from its peak of 16.5% in 2011.4
In the fourth quarter, TSMC’s revenue continued to grow sequentially due to strong demand for 20nm wafers. By application, Communication and Computer increased 18% and 7%, while Consumer and Industrial/Standard declined 21% and 11%, respectively. Contribution from 20nm process technology increased from 9% in Q3’14 to 21% in Q4’14. Advanced technologies (28nm and below) accounted for 51% of total wafer revenue, up from 43% in Q3’14. Revenue from Fabless/System customers accounted for 85% of total wafer revenue in Q4’14. Gross margin was 49.7% in Q4’14, 0.8 percentage point lower than Q3’14, mainly reflecting 20nm margin dilution and lower capacity utilization. On a full-year basis, gross margin for 2014 was 49.5%, up 2.4 percentage points from 2013, mainly attributed to higher capacity utilization and partially offset by 20nm margin dilution.
Q4 2014 calendar quarter orders for Applied Materials, Inc. were US$2.27bn, up 1% sequentially and down 1% percent year over year. Net sales were US$2.36bn, up 4% sequentially and 8% year over year. The net income was US$338mn or US$0.27 per diluted share. Applied Materials has stepped up investments to prepare for the ongoing transitions to larger wafer sizes and smaller process nodes. The ramp up in FinFET, 3D NAND and new display technology is expected to drive growth in future. There are also signs of improvement in the Display side of the business, backed by PVD tools. The drivers of this business are larger TV screens and better mobile displays that involve more complicated production processes and new tools. Due to major transitions in semiconductor and Display technology, big opportunities lie ahead for Applied Materials. Its upcoming merger with Tokyo Electron will further take it toward its long-term strategic goals. Applied has strengthened its R&D and, at the same time, increased investment in product development.5