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© melpomenem dreamstime.com Analysis | December 09, 2016

Top 10 fabless IC design companies – Qualcomm in the lead

Qualcomm CDMA Technologies tops the projected ranking of the top 10 fabless IC design houses worldwide based on annual revenues for 2016, according to TrendForce’s analysis.
Broadcom Limited is expected to be runner-up, while MediaTek will take third place. The ranking positions of these three companies are fairly secure in the short term because collectively they would represent about 65% of the total revenue generated by all the design houses that are listed on this year’s top 10 ranking.

TrendForce finds that changes in the top 10 ranking between 2015 and 2016 were mainly attributed to mergers and acquisitions. The IC supplier formerly known as Avago climbed to second place in this year’s ranking by acquiring Broadcom Corporation. Avago also subsequently operates under the new name Broadcom Limited. The deal has allowed other companies to move up in the ranking.

Taiwan’s MediaTek took third place in this year’s ranking as the company’s acquisition of four compatriot IC design houses gave it a much wider lead in revenue over the following seven companies in the ranking. Realtek, another Taiwan-based design house is expected to become one of the top 10 this year with its annual revenue growth at a high of 22.5%.

Among this year’s top 10 IC design houses by revenue, MediaTek, Nvidia, AMD, Xilinx and Realtek are expected to register annual growth. MediaTek’s annual revenue growth is estimated at 17.6% this year as the company has expanded via acquisitions and profited from strong demand from Chinese smartphone brands. Nvidia, which has established itself in the gaming market during recent years, is also benefitting from revenue increases in areas such as data centers and automotive electronics. As for AMD, the company has successes in developing its semi-custom chip business and is gradually expanding into the embedded and enterprise markets. These three areas contributed to significant revenue increase for AMD this third quarter and are likely to become important market segments for the company in the near future.

Qualcomm, Broadcom, Marvell, Novatek and Dialog are expected to post annual revenue declines in 2016, based on TrendForce’s projection. In addition to fending off competition from MediaTek, Qualcomm this year faces growing challenges from large Chinese IC design houses. HiSilicon and Spreadtrum for example have made significant progress in catching up technologically. Moreover, HiSilicon is supplying more chips to its group company Huawei. Qualcomm was also affected by the discontinuation of Samsung’s flagship smartphone Galaxy Note 7.

Broadcom Limited’s revenue decline was caused by the sale of its Wireless Internet of Things business to the semiconductor company Cypress. Novatek on the other hand has seen its revenue growth retreats as the global consumer electronics market reach a growth plateau.

TrendForce further notes that the two major Chinese fabless IC design houses HiSilicon and Spreadtrum have not released their financial results to the public. For that reason, these two companies are excluded from TrendForce’s 2016 ranking. Nonetheless, TrendForce’s analysis indicates that HiSilicon and Spreadtrum are expected to do well revenue-wise this year on account of the strong growth in China’s smartphone market. HiSilicon’s annual revenue for 2016 is estimated around USD 3.98 billion, an increase of 11.8% from 2015. Spreadtrum’s revenue for this year is estimated around USD 1.91 billion, translating to an annual growth of 8.1%.

Table: Global top 10 fabless IC design houses based on annual revenue, 2015~2015
(Revenues in million USD)
Company2015Company20152016 (E)YoY
Qualcomm (QCT)16,008Qualcomm (QCT)16,00815,284-4.5%
Broadcom Corp8,414Broadcom Limited (Avago)15,40214,166-8%
MediaTek7,588.6MediaTek7,588.68,92217.6%
Avago6,988Nvidia4,152.74,585.910.4%
Nvidia4,152.7AMD3,9904,1834.8%
AMD3,990Marvell2,8052402.9-14.3%
Marvell2,805Xilinx2,2192,3003.6%
Xilinx2,219Novatek1,6411,483-9.6%
Novatek1,641Realtek1,0241254.122.5%
Dialog1,355Dialog1,3551,158-14.6%

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