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Gartner Says Worldwide Semiconductor Revenue Grew 22.2 Percent in 2017

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Worldwide totalled $419.7 billion in 2017, a 22.2 percent increase from 2016, according to preliminary results by Gartner, Inc. Undersupply helped drive 64 percent growth in the memory market, which accounted for 31 percent of total in 2017.

"The largest memory supplier, Electronics, gained the most market share and took the No. 1 position from the first time has been toppled since 1992," said Andrew Norwood, research at "Memory accounted for more than two-thirds of all revenue growth in 2017, and became the largest semiconductor category."

The key behind the booming memory revenue was higher prices due to a supply shortage. NAND prices increased year over year for the first time ever, up 17 percent, while DRAM prices rose 44 percent.

Equipment companies could not absorb these price increases so passed them onto consumers, making everything from PCs to more expensive in 2017.

Other major memory vendors, including and Micron Technology, also performed strongly in 2017 and rose in the rankings.

Second-placed grew its revenue 6.7 percent in 2017, driven by 6 percent growth in data center processor revenue due to demand from cloud and Intel's PC processor revenue grew more slowly at 1.9 percent, but average PC prices are on the rise again after years of decline following the market's shift from traditional desktops toward two-in-one and

The current rankings may not last long, however, "Samsung's lead is literally built on sand, in the form of memory silicon," said Mr.

Norwood. "Memory pricing will weaken in 2018, initially for NAND and then DRAM in 2019 as increases its memory production capacity. We then expect to lose a lot of the revenue gains it has made."

2017 was a relatively quiet year for mergers and acquisitions. Qualcomm's acquisition of was one big deal that was expected to close in 2017, but did not. still plans to complete the deal in 2018, but this has now been complicated by Broadcom's attempted takeover of

"The combined revenues of Broadcom, and were $41.2 billion in 2017 a total beaten only by and Intel," said Mr. Norwood. "If can finalize this double acquisition and Samsung's memory revenue falls as forecast, then Samsung could slip to third place during the next memory downturn in 2019."

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(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Tue, January 09 2018. 14:39 IST