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© pichetw dreamstime.com Analysis | May 16, 2017

Broadcom dethroned Qualcomm as Top IC design house

Nearly all companies listed on TrendForce’s revenue ranking of the global top 10 fabless IC design houses for the first quarter posted year-on-year growth.
Novatek was the sole exception and saw a slight dip in its revenue compared with the same period a year ago. For IC companies, the growing sources of end-market demand for this year come from networking equipment, data centers, servers and automotive electronics.

Broadcom Limited, which is a major supplier of products related to network infrastructure and wireless communication, dethroned Qualcomm as the revenue leader for the first quarter of 2017. NVIDIA exhibited impressive growth recently and took third place by displacing MediaTek, which occupied that spot for quite a long period.

TrendForce analyst CY Yao pointed out Broadcom Limited, which was the resulting entity of Avago’s acquisition of Broadcom Corporation, has remained a dominant beneficiary of the worldwide market for network infrastructure. The company’s revenue already surpassed Qualcomm’s by the fourth quarter of 2016. Yao added that Qualcomm has been fending off competition from HiSilicon and Spreadtrum as well as contending with the stalling growth of the smartphone market. “As a subsidiary of the world’s third-largest smartphone brand Huawei, HiSilicon is now supplying mobile SoCs used in the majority of its parent company’s products,” said Yao. “Also, Qualcomm’s chip business in the short term will have difficulty to return to making around USD 4 billion a quarter on average.”

Major Fabless IC Design Houses (revenues 1Q/2016 and 1Q/2017; in USD million)

RankingCompany1Q/171Q/16YoY in %
1Broadcom4116296938.7
2Qualcomm3676333710.2
3NVIDIA1853115660.3
4MediaTek180918030.3
5AMD98483218.3
6Xilinx6095716.7
7Marvell5705660.8
8Novatek352354-0.5
9Realtek32229011.1
10Dialog271241.412.3

* NVIDIA's revenue excludes revenues from OEM businesses and IP licensing
** Exchange rate between USD and NTD for this table is 1:31
*** Qualcomm's revenue includes revenue from Qualcomm CDMA Technologies (QCT) and excludes all other sources such as Qualcomm Technology Licensing (QTL)


NVIDIA posted the largest revenue increase among the top ten design houses in the first quarter with a year-on-year growth rate reaching 60.3 percent. In addition to data centers and gaming products as its main revenue sources, NVIDIA has also made gains in the automotive electronics market. MediaTek, which was overtaken by NVIDIA and dropped to fourth place, faces the same problems as Qualcomm but is experiencing more severe impacts. MediaTek’s revenue result for this first quarter was slightly positive.

On the other hand, the company has encountered a major setback with the sales of its Helio X30. Though designed for flagship smartphones, X30 has not been well received among major brand vendors. The lack of interest in X30 could continue to adversely affect MediaTek’s revenue going into the second quarter. Yao believes that if MediaTek is unable to make a turnaround soon, the company’s chance of returning to the third place of the ranking is going to be slim.

On the whole, most design houses in the ranking have been maintaining a healthy level of revenue growth. Demand pertaining to networking equipment, data centers and servers are significant revenue drivers for major chip companies such as Broadcom Limited, NVIDIA and Xilinx. Going forward, the majority of the companies in the top 10 ranking are expected to record revenue growth for this second quarter. In the smartphone chip market, Qualcomm’s lead over MediaTek could widen as shipments of Qualcomm’s Snapdragon 835 expands.
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More information can be found at Trendforce.

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December 13 2017 10:15 PM V8.9.2-2