"The loss of market share in an end application, such as mobile phones, by a vendor customer can have a dramatic effect on the semiconductor vendor's business."

Gartner analysts said the performance of most semiconductor vendors this year can be traced to three major trends running through the industry: the participation in high-growth device markets such as NAND flash; gaining share in existing markets or exposure to original equipment manufacturers (OEMs) that have been winning or losing share.

"The first two trends are in the hands of the management of the vendor to set a clear strategy to take advantage of new opportunities, or to improve performance and to execute that strategy without distraction from everyday events," Norwood says.

"The third trend, being aligned with successful OEMs, is much more difficult to achieve. In an industry increasingly being driven by consumer trends and fads, this volatility in the success of equipment vendors is only going to get more extreme. The only approach a vendor can take is to make sure that it is not overexposed to one particular OEM or market."