2009: Chip giants weather legal and economic storms

Sector to enter 2010 with renewed confidence.

The semiconductor industry had a very bad start to the year, but 2009 has ended with more hope and most manufacturers are now saying they have reached the bottom of the market and the only way is up.

All in all it’s been a rollercoaster ride. At the start of the year Intel and AMD were frantically slowing down production and making cost savings any way they could, including layoffs. There were some truly abysmal quarterly results and everyone prepared for the worst.

Because firms acted so quickly to stop production and cut costs, the industry has been faster to recover than some sectors of the economy. No silicon firms went cap in hand to the government for a bailout. Nevertheless there were calls for the processor industry to amalgamate R&D to get better economies of scale.

On the actual technology side, chip development proceeded as normal. Intel confirmed that it was still moving fast towards a 32nm production process for its chips and showed off the first model, but for the company this year was all about spreading Nehalem’s footprint across the PC and server markets through its Core i5 and Core i7 announcements.

Intel is also making a major push to make the Atom the chip of choice for the netbook and consumer electronics market, but it faces increasing competition from ARM, which has taken its miniature processors to dual core already.

AMD signed several deals to widen its sales base and continued with its multicore platform line as expected. It has concentrated more on lower end chips this year, as well as touting its power efficiency, server hardware and easy upgrade path compared to other manufacturers.