CNET también está disponible en español.

Ir a español

Don't show this again

Christmas Gift Guide
Tech Industry

Chipmakers hit hard in '98

Seven of the world's 11 largest semiconductor manufacturers saw their revenues decline by more than 14 percent last year.

Seven of the world's 11 largest semiconductor manufacturers saw their revenues decline by more than 14 percent in 1998, a year that shaped up to be one of the worst in a decade for silicon makers.

An excess of factory capacity, combined with sluggish demand in Asian market, conspired to shrink sales for the more than 63 percent of the world's largest chipmakers, according to Joe D'Elia, associate director and program manager for Dataquest's Semiconductor Europe program.

Memory makers such as Hitachi and Samsung suffered the most because of the See special report: 
Trouble in the Valley lingering glut of DRAM chips. Hitachi, the biggest loser in the group, saw revenues shrink 26.2 percent last year, falling from $6.3 billion in 1997 to an estimated $4.6 billion in 1998. Samsung's revenues declined 18.9 percent, form $5.9 billion an estimated $4.8 billion. Texas Instruments, which closed and subsequently sold many of its memory operations in 1998, saw chip revenue decline 18.4 percent.

"Semiconductor vendors around the world are glad to see the back of 1998, a year slated to be the worst since the mid-'80s," he said.

The bright spots for the industry seemed to be Europe and microprocessors. Philips, STMicroelectronics, and Siemens, all based in Europe, all saw revenue growth. Their surge marked the first time three European companies made the list. Siemens led the group of 11 with a 12.4 percent rise in revenues, the only company to experience double-digit growth.

Other companies saw the continent as a boon market as well. Europe was the only region in the world where vendor revenue gains outnumbered the declines. Seven of the top ten vendors posted European revenue gains in 1998.

Intel, the No. 1 semiconductor manufacturer, expanded its lead over Japan's NEC, the second-largest chipmaker, with a 4.3 growth in revenue. Dataquest estimates that the company pulled in $22.7 billion in revenue. Intel's revenues got a kick-start in the second half with a greater-than-expected surge of computer purchases that erased the memory of a slow first half, according to analysts.

Nevertheless, according to to various analysts and industry organizations such as the Semiconductor Industry Organization, say the excess factory capacity and memory inventories are shoring up and could lead to improved sales.