IC Insights: Pure-Play Foundries & Fabless Suppliers are Stellar
In the top 25 2012 semiconductor supplier rankings, Qualcomm and GlobalFoundries registered over 30 percent growth
IC Insights' April Update to The 2013 McClean Report will show a ranking of the 2012 top 50 semiconductor suppliers.
The table below (Figure 1) shows a preview of the top 25 companies.
The top 25 worldwide semiconductor (ICs and O-S-Ds - optoelectronics, discretes, and sensors) sales leaders for 2012 include 10 suppliers headquartered in the U.S.
There are also seven in Japan, three in Taiwan, three in Europe, and two in South Korea, a relatively broad representation of geographic regions.
The top 25 ranking also includes three pure-play foundries (TSMC, GlobalFoundries, and UMC) and six fabless companies.
The top five semiconductor suppliers all have different business models.
Intel being essentially a pure-play IDM, Samsung a vertically integrated IC supplier, TSMC a pure-play foundry, Qualcomm a fabless company, and TI a fab-lite semiconductor supplier.
IC Insights says that in 2012, the pure-play foundries and fabless companies were the star performers.
IC foundries are included in the top 25 semiconductor supplier ranking because IC Insights has viewed the ranking as a top supplier list, not as a marketshare ranking, and realises that in some cases semiconductor sales are counted twice.
The market research company points out, "With many of our clients being vendors to the semiconductor industry (supplying equipment, chemicals, gases, etc.), excluding large IC manufacturers like the foundries would leave significant "holes" in the list of top semiconductor suppliers. Foundries and fabless companies are each clearly identified in Figure 1 (the table above). In the April Update to The McClean Report, "marketshare" rankings of IC suppliers by product type are also presented and foundries are excluded from these rankings."
Not all foundry sales should be excluded when attempting to create marketshare data. For example, although Samsung has a large amount of foundry sales, most of its sales are to Apple. And since Apple does not re-sell these devices, counting these foundry sales as Samsung semiconductor sales does not introduce double counting.
In total, the top 25 semiconductor companies' sales declined by 1 percent in 2012, two points less than the total worldwide semiconductor market decline of 3 percent. It took semiconductor sales of at least $3 billion in 2012 to make the top 25 ranking, about the same dollar amount needed to construct a 10K wafer-per-month 300mm wafer fabrication facility.
Intel remained firmly in control of the number one spot in the 2012 ranking. IC Insights says this was helped by the acquisition of Infineon's wireless IC business, which extended its lead over second-ranked Samsung by registering a 52 percent higher semiconductor sales level than Samsung in 2012 as compared to a 24 percent margin in 2010.
The only movement with regard to the top five spots in the 2012 ranking was that fabless supplier Qualcomm registered a 34 percent surge in sales and moved up three positions to replace TI as the fourth-largest semiconductor supplier.
After its 21 percent drop in sales in 2012, Elpida, which is due to be acquired by Micron sometime in the first half of 2013, fell five spots in the top 25 ranking going from 19th place in 2011 to 24th place in 2012.
However if Micron and Elpida's 2012 sales were combined, the "new" company would have had $11,077 million in total sales and would have been ranked as the seventh-largest semiconductor supplier, only $140 million behind sixth-ranked Toshiba.
New entrants into the top 25 ranking in 2012 included Taiwan-based fabless communications chip specialist MediaTek, which moved from being ranked 26th in 2011 to 21st in 2012.
MediaTek is Taiwan's largest non-foundry semiconductor supplier. Japan-based Sharp jumped five positions in the ranking last year and moved into the 22nd spot. Sharp's 14 percent total semiconductor sales increase in 2012 was spurred by a 20 percent surge in its O-S-D sales.
As shown in the table below, there was a wide range of growth rates among the worldwide top 25 semiconductor suppliers last year.
That was despite the close on-going relationship between GlobalFoundries (a 31 percent increase) and AMD (a 17 percent decline). The two companies were at opposite ends of the growth spectrum in 2012.
Considering that AMD, the original "parent" and largest customer of GlobalFoundries, suffered such a steep sales decline last year, it is obvious that GlobalFoundries' spike in revenue in 2012 was driven mostly by its success in attracting new IC foundry customers, for example ST, Freescale and Qualcomm.
The continued success of the fabless/foundry business model is clear when examining the top 25 semiconductor suppliers ranked by growth rate. The top seven performers included four fabless companies (Qualcomm, MediaTek, Broadcom, and Nvidia) and two pure-play foundries (GlobalFoundries and TSMC).
Illustrating the very difficult year faced by the majority of the top 25 semiconductor suppliers, 17 of the top 25 ranked companies registered a sales decline last year, including 8 of the top 10 largest semiconductor suppliers in the world (#1 Intel, #2 Samsung, #5 TI, #6 Toshiba, #7 Renesas, #8 SK Hynix, #9 ST, and #10 Micron).
Of the seven top 25 semiconductor companies that registered a sales increase in 2012, four are headquartered in the U.S. and include Qualcomm, GlobalFoundries, Broadcom, and Nvidia.
