AMD to Make Top 10 List of World’s Largest Chip Makers

After years of coming close to breaking into the top-10 global semiconductor rankings, AMD may finally hit the big time before the end of 2006, according to a preliminary ranking from iSuppli Corp. AMD’s semiconductor revenue is expected to explode by a stunning 90 percent in 2006, which will cause the company’s ranking to jump eight places, making it the world’s seventh-largest chip maker for the year.

Memory maker Hynix also cracks the list just behind AMD at number eight. Hynix set to achieve a 32.5 percent increase in revenue, pushing its ranking up three positions to take the eighth position in 2006.

“This marks the first time in the six years iSuppli has been compiling annual semiconductor rankings that AMD and Hynix have rated among the top 10,” said Dale Ford, vice president, market intelligence services for iSuppli. “This is an impressive accomplishment for both companies.”

The strong performance of the two companies comes amid renewed strength in worldwide semiconductor sales for the year. iSuppli’s revised estimate for semiconductor sales in 2006 foresees revenue of $258.5 billion, up 9 percent from $237.3 billion in 2005.

AMD’s revenues in 2006 are expected to increase to $7.5 billion, up $3.6 billion from $3.9 billion in 2005. AMD’s rapid rise in revenue this year is due to strong growth in its microprocessor sales, combined with its acquisition of ATI Technologies in October. AMD is expected to achieve approximately 37.5 percent growth in its microprocessor revenue in 2006 on the strength of its highly popular dual-core products.

South Korean memory chip maker Hynix in 2006 achieved semiconductor revenue of $7.4 billion, up $1.8 billion from $5.6 billion in 2005, driven by surging sales of its lines of DRAM and NAND-type flash memory. iSuppli projects Hynix’s DRAM revenue will grow by $1.1 billion in 2006 and its NAND flash revenue will rise by $770 million.

In comparison, Samsung Electronics Co Ltd. is expected to see its memory revenue increase by a smaller amount in 2006, at a $1.77 billion rise.

“Hynix’s achievement of surpassing the much-larger Samsung in terms of dollar growth in memory chip revenue in 2006 represents a considerable accomplishment,” Ford said.

Infineon Technologies AG of Germany dropped out of the top-10 rankings in 2006 due to the spin-off of its memory business, now called Qimonda AG. If Infineon and Qimonda had not been split in 2006, the combined company would have seen its revenue grow by 29.5 percent and it would have moved to fourth place, up from sixth in 2005. As separate companies, Qimonda is projected to rank No. 12 and Infineon 14th in 2006.

Intel Corp., Renesas Technology and NEC are the only semiconductor companies among 2005’s top 10 to see their revenues decline in 2006. Intel’s revenue decline will leave the company with its lowest share of the market since before 2000, at 12.1 percent. NEC will drop out of the top 10 due to its expected annual revenue decline of 0.2 percent.

iSuppli projects that the global semiconductor market will grow by 9 percent in 2006 based on iSuppli’s quarterly semiconductor market share research of 110 leading semiconductor suppliers. Memory chips are driving the growth of the industry with projected annual growth of 21.5 percent for the year. DRAM is the key factor propelling memory IC revenue expansion in 2006 with forecasted growth of 32 percent.

Microprocessor revenues will decline by 6.6 percent for the year due to aggressive market-share battles that are driving down prices. However, sales revenue for digital signal processors will rise by 6.6 percent for the year.