Despite a revenue plunge of 9.5 per cent, Intel will retain its title as king of the hill for the worldwide semiconductor industry, posting annual revenue of $31.3 billion for 2006, according to analyst Gartner Inc.

Intel's top competitors will post much better numbers, all recording double-digit revenue growth as they enjoy strong sales in dynamic RAM (DRAM) memory chips, wireless semiconductors and NAND flash, according to preliminary results for 2006 that Gartner released on Thursday.

Overall, the market is set to grow 11.3 per cent to $261.4 billion. Intel's sinking results in this rising tide will cause its market share to sag from 14.7 per cent in 2005 to 12 per cent. The company was only able to record its fifteenth straight year as a market leader because it had banked such a large lead on smaller rivals like Samsung Electronics (with 7.9 per cent market share) and Texas Instruments Inc (4.5 per cent).

Intel's problem was that its competitor Advanced Micro Devices (AMD) sold superior processors through the third quarter, judging by the chips' balance of price and performance in the server and consumer enthusiast segments, Gartner said. Intel lost even more revenue as the two companies launched a price war, which hurt Intel as the larger company more than AMD .

Meanwhile, Samsung strengthened its position as the industry's second-biggest vendor by selling more DRAM, static RAM (SRAM) and NAND flash chips than any other company.

Samsung will grow 12.4 per cent to reach revenues of $20.6 billion, followed by Texas Instruments growing 17.4 per cent to $11.9 billion and Infineon Technologies AG growing 29 per cent to reach $10.6 billion, Gartner said. The bottom half of the top ten were all predicted to record revenue of single-digit billions, including STMicroelectronics, Toshiba, Renesas Technology, Hynix Semiconductor, AMD and Freescale Semiconductor.

The semiconductor industry will grow more slowly in 2007, likely rising by a high single-digit percentage compared to its 11.3 per cent rise in 2006, Gartner said. The high points of the coming year will include continuing strength in the DRAM market and strong consumer electronics sales.