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© fouquin christophe dreamstime.com Analysis | November 16, 2016

Five top-20 semi suppliers to show double-digit growth

Nvidia and MediaTek forecast to register the fastest 2016 growth rates of 35% and 29%, respectively.
IC Insights' forecasted top-20 worldwide semiconductor (IC and O S D—optoelectronic, sensor, and discrete) sales ranking for 2016 includes eight suppliers headquartered in the U.S., three in Japan, three in Taiwan, three in Europe, two in South Korea, and one in Singapore, a relatively broad representation of geographic regions.

The top-20 ranking includes three pure-play foundries (TSMC, GlobalFoundries, and UMC) and five fabless companies. If the three pure-play foundries were excluded from the top-20 ranking, U.S.-based fabless supplier AMD (USD 4.238 million), China-based fabless supplier HiSilicon (USD 3.762 million), and Japan-based IDM Sharp (USD 3.706 million), would have been ranked in the 18th, 19th, and 20th positions, respectively. In August 2016, China-based contract assembler Foxconn bought a controlling interest (66%) in Sharp for USD 3.8 billion.

In total, the 17 non-foundry companies in the forecasted top 20-ranking are expected to represent 68% of the total USD 357.1 billion worldwide semiconductor market this year, up 10 points from the 58% share the top 17 companies held in 2006.

IC Insights includes foundries in the top-20 semiconductor supplier ranking since it has always viewed the ranking as a top supplier list, not a marketshare ranking, and realises that in some cases the semiconductor sales are double counted. 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. As shown in the listing, the foundries and fabless companies are identified. In the April Update to The McClean Report, marketshare rankings of IC suppliers by product type were presented and foundries were excluded from these listings.

2016F Rank2015 RankCompany2015 Sales2016F Sales2016/2015 Forecast
11Intel52.14456.3138%
22Samsung42.04343.5354%
33TSMC26.43929.32411%
45Qualcomm16.00815.436-4%
56Broadcom Ltd.15.18315.3321%
64SK Hynix16.64914.234-15%
77Micron14.48312.842-11%
88TI12.11212.3492%
910Toshiba9.43910.92216%
109NXP10.5639.498-10%
1113MediaTek6.6998.61029%
1211Infinion6.9167.3436%
1312ST6.8736.9441%
1417Apple*5.5316.49317%
1514Sony6.2636.4663%
1618Nvidia4.6966.34035%
1716Renesas5.6825.7511%
1815GlobalGoundries5.7295.085-11%
1919On Semi4.8664.8580%
2020UMC4.4644.4550%
Total inc. Foundries272.772282.1303%
Total exl. Foundries236.140243.2663%

List includes pure-play foundries as well as supplier. *Custom processors for internal use made by TSMC and Samsung foundry services. 2016 and 2015 include Intel/Altera, Broadcom/Avago, NXP/Freescale, GlobalFoundries/IBM and ON/Fairchild sales for all of 2015 and 2016. (Data from IC Insights)

Nine of the top-20 companies are forecast to have sales of at least USD 10.0 billion this year. As shown, it is expected to take about USD 4.5 billion in sales just to make it into the 2016 top-20 semiconductor supplier list. Moreover, if Qualcomm’s purchase of NXP is completed, as is expected in late 2017, the combined annual semiconductor sales of these two companies will likely be over USD 25 billion going forward. Overall, no new entrants are expected to make it into the top-20 ranking in 2016 as compared to the 2015 ranking.

Intel is forecast to remain firmly in control of the number one spot in the top-20 ranking in 2016. In fact, it is expected to increase its lead over Samsung’s semiconductor sales from only 24% in 2015 to 29% in 2016. The biggest upward move in the ranking is forecast to be made by Apple, which is expected to jump up three positions in the 2016 ranking as compared to 2015. Other companies that are forecast to make noticeable moves up the ranking include MediaTek and Nvidia, with each company expected to improve by two positions.

Apple is an anomaly in the top-20 ranking with regards to major semiconductor suppliers. The company designs and uses its processors only in its own products – there are no sales of the company’s MPUs to other system makers. IC Insights estimates that Apple’s custom ARM-based SoC processors will have a “sales value” of USD 6.5 billion in 2016, which will place them in the 14th position in the forecasted top-20 ranking.

In total, the top-20 semiconductor companies’ sales are forecast to increase by 3% this year, which would be two points higher than IC Insights’ current worldwide semiconductor market forecast for 2016. Although, in total, the top-20 2016 semiconductor companies are expected to register a 3% increase, there are five companies that are forecast to display a double-digit 2016 jump in sales (Nvidia, MediaTek, Apple, Toshiba, and TSMC) and four that are expected to register a double-digit decline (SK Hynix, Micron, GlobalFoundries, and NXP).

The fastest growing top-20 company this year is forecast to be U.S.-based Nvidia, which is expected to post a huge 35% year-over-year increase in sales. The second-fastest growing top-20 company in 2016 is expected to be Taiwan-based MediaTek, which is forecast to post a strong 29% increase in sales this year.

As expected, given the possible acquisitions and mergers that could/will occur over the next few years (e.g., Qualcomm and NXP), the top-20 ranking is likely to undergo a significant amount of upheaval as the semiconductor industry continues along its path to maturity.

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