STAMFORD, CT – Worldwide semiconductor revenue was $261.9 billion in 2008, down 4.4% year-over-year, according to preliminary results from Gartner Inc.

"In the last quarter of 2008, market conditions deteriorated significantly, and as the fourth quarter has progressed, many vendors have issued updated guidance for the quarter, reflecting weakening market conditions," said Andrew Norwood, research vice president at Gartner. "Unfortunately for vendors, 2009 is going to be considerably worse. Some have compared the precipitous decline in semiconductor demand to that of the 2001 ‘dot-com' bubble. However, unlike 2001, this economic downturn is much more broad-based and not limited primarily to the technology sector.

"Given this increased uncertainty, all semiconductor companies should be focused on cash preservation and inventory management," Norwood said. "This is also an excellent opportunity for the larger companies with stronger balance sheets to make strategic acquisitions."

For the 17th consecutive year, Intel held the top spot, increasing its market share to 13.1% this year. When looking at continuing operations, Intel's revenue increased 6.5%, 11 percentage points above the market average.

Qualcomm had the strongest growth rate among the top 10, growing revenues 15% in 2008. Although the first three quarters were strong, the company felt the impact of the economic downturn in the fourth quarter.

Hynix Semiconductor’s revenue fell 29.7%, the most of any of the top 10 semiconductor vendors. This decline is attributed to the price drop of DRAM and NAND.

Infineon Technologies struggled this year as well. "Infineon had a tough year, as its memory subsidiary, Qimonda, which it is looking to divest, is becoming marginalized within the DRAM industry," Norwood said.