Intel’s chip marketshare slips in 2010 — Gartner

Intel led the world semiconductor (or chip) market in 2010, though its share fell from 14.6% to 14% as competition from former cell-phone chip makers intensified.

According to Gartner numbers, the chip industry grew by a whopping 30% in 2010 to almost $300 billion — making it not only one of the world’s largest industries, but also perhaps its fastest growing.

“The market began to surge in the second half of 2009, as demand recovery in a variety of market sectors resulted in strong order rates. This continued, almost frantically, during the first half of 2010 as demand soared, prices rose, and we saw lead times expanding significantly,” said Peter Middleton, principal analyst at Gartner.

Intel’s loss in marketshare was primarily because of the expansion of the chip market. Unlike five or ten years ago, chips are now being used as memory devices (pen drives, solid state drives etc.) and not just processors. Intel is yet to have a solid footing in the memory chip business.

The boom in smartphones — an area Intel is yet to enter — also challenged Intel’s market dominance.

No such problems for Samsung Electronics, the number two chip maker with a 9% marketshare. It increased its share, thanks a strong growth year due to its exposure to the booming DRAM and NAND flash markets. Memory accounted for about 80 percent of the company’s sales in 2010.

At No. 3, Toshiba’s semiconductor revenue grew 28.7 percent in 2010. The company grew its NAND flash memory business for mobile devices, as well as its discrete and optical electronics device businesses.

Elsewhere in the top 10, tenth-placed Broadcom outperformed the overall industry by a considerable margin — with growth of 53 percent over 2009. This allowed it to climb two ranks and enter the top 10 for the first time, Gartner said.

The top 25 semiconductor suppliers accounted for 69.1 percent of semiconductor industry revenue in 2010, and as a group, memory vendors showed the strongest growth.