Q1 was worst quarterly semi performance for 10 years

In Q1 the chip market posted its worst quarterly performance in 10 years, according to IHS Markit.

Revenues fell to $101.2 billion in Q1,;down 12.9% from $116.2 billion in Q118. This represented the largest y-o-y quarterly decrease since the second quarter of 2009. Memory drove the sales to plunge exacerbated by excess inventory and falling demand from key end markets. If memory were excluded from total semiconductor revenue, the market would have declined by ~4.4% on a y-o-y basis.

Of the top ten vendors,

• Samsung’s sales dropped most falling by 34.6% y-o-y. Samsung, (at No.2 in the rankings) was hit by falling demand, rising inventory and plunging prices for memory chips, which constituted nearly 84% of the company’s semiconductor business in Q1.
• Hynix, at No.3, had a 26.3% revenue drop and  Micron, at No.4, fell by 22.5% compared Q118.
• The memory market fell 25% q-o-q with DRAM revenues down 26.1% sequentially, while NAND flash declined by 23.8%.
• Intel, at No.1,  posted the best performance among the top-10 competitors in the first quarter, with sales falling by a negligible 0.3% year-over-year. Intel escaped the worst effects of the chip downturn because the company is not heavily exposed to memory sales, with memory chips accounting for less than 6% of company revenues. However, the company’s microprocessor business was still affected by rising inventory and decreasing demand from the PC, enterprise and cloud sectors. Based on its relatively strong results, Intel was able to hold on to the top spot in the semiconductor rankings in the first quarter of 2019. This represented the second consecutive quarter that Intel has held market leadership, after moving past Samsung in the fourth quarter of 2018.
• Infineon rose three places un the rankings to take eighth place. Infineon outperformed its competitors by limiting its sequential revenue decline to just 0.3% boosted by auto IC sales.
• ST’s sales declined by 6.7% year-over-year because of sluggish sales in the wireless market.
• Nvidia had the third-worst results of the top-10 players in Q1 with a 23.7% y-o-y revenue drop. Nvidia’s results were impacted by the steep decline of cryptocurrency and AMD’s move to push its GPU products into data center applications – directly competing with Nvidia.

Source: Electronics Weekly news