Gartner noted that the top 25 semiconductor vendors' combined revenue increased 6.2 percent, a significantly better performance than the rest of the market, whose revenue growth was 2.9 percent.
This was, in part, due to the concentration of memory vendors, which saw significant growth in the top ranking.
Andrew Norwood, research vice president at Gartner said, "After a weak start to 2013 due to excess inventory, revenue growth strengthened in the second and third quarters before leveling off in the fourth quarter. Memory, in particular DRAM, led this growth, not due to strong demand, but rather weak supply growth."
Norwood said, "In fact, the overall market faced a number of demand headwinds with PC production declining 9 percent and the premium Smartphone market showing signs of saturation, with growth tilting toward lower-priced, entry-level and midrange Smartphone models."
He said, "These demand headwinds become very visible when looking at revenue growth outside of memory, where the rest of the semiconductor market could only muster 0.4 percent growth."
Gartner noted that Intel recorded a 2.2 percent revenue decline as strong performance in its data center and embedded systems group was not enough to offset a declining PC market, and limited traction and declining prices for its tablet and smartphone solutions.
However, the company maintained the No. 1 market share position for the 22nd consecutive year, capturing 15.2 percent of the 2013 semiconductor market, down slightly from its peak of 16.5 percent in 2011.
As a group, memory vendors outperformed the rest of the semiconductor industry.
"Within the memory market DRAM was in the midst of a strong rebound following two years of revenue decline; the recovery started at the end of 2012 when the market was moving back into an undersupply due to lack of new capacity resulting in commodity DRAM pricing more than doubling during the year," said Norwood.
SK Hynix and Micron Technology benefited the most from the strong memory market, propelling them both into the top five for the first time.
SK Hynix's revenue increased 43.2 percent, the strongest organic growth in the top 25.
The revenue growth was due to its exposure to the booming commodity DRAM market as the industry entered an undersupply and pricing surged.
Revenue could have been higher had it not been for a major fire at the company's DRAM fab in Wuxi, China, which accounted for 50 percent of the company's DRAM production, Gartner said.
Micron Technology saw the biggest revenue growth among the top 25 due to its midyear acquisition of Elpida Memory.
The company benefited from the recovery in commodity DRAM pricing and strong growth for low-power DRAM where Elpida is strong.
In NAND flash, Micron was able to aggressively push its NAND into the computing segment, which is projected to represent roughly 60 percent of its demand this year.
Gartner noted that had all of Elpida's revenue been included in the Micron number — rather than just the second half — then the U.S. company would have jumped ahead of rival SK Hynix in the rankings.
--IBNS (Posted on 04-12-2013)