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This statistic highlights Revenue by semiconductor suppliers across the globe.
This article discusses the statistics on Revenue by semiconductor suppliers in 2020. Semiconductors have become an essential part of technology, so much so that the semiconductor industry is the driving force behind the consumer electronics industry. Unsurprisingly, many companies that manufacture mobiles and computing devices also happen to be suppliers of semiconductors. There are essentially two types of semiconductor suppliers – the foundries and the fabless. Under the foundry or fab model, the company carries out the entire fabrication process, that is, the manufacturing, design and marketing of the semiconductor chips. In the fabless model, only the design and marketing of the semiconductor is decided by the supplier whereas the fabrication of the wafers is outsourced to another company known as a foundry.
The advantage of a fabless model is that such companies have the flexibility of choosing the foundry and do not have to incur huge costs in maintaining a fabrication plant. It allows the company to instead invest in innovating their products. However, being a foundry helps to have better control over the entire process of creating and delivering semiconductor chips. Which is why, Samsung Electronics and Intel, both foundries, have the highest worldwide revenues compared to fabless companies such as Qualcomm and Broadcom.
2018 was a great year for semiconductors, with a 12.23% jump in global revenues over 2017. This was driven by the demand for memory chips towards the end of 2017 and at the beginning of 2018. While Samsung maintained its number one position in semiconductor sales for the past five quarters, Intel’s semiconductor revenues surpassed that of the Korean tech giant by US $ 2,644 million in Q4 FY2018. As there was a decline in mobile handsets, Samsung had the most to lose. However, Samsung led overall sales in 2018.
During the opening quarter of 2019, overall revenues fell by 13% from Q4 FY2018. The biggest losers were two of the world’s biggest memory chips producers Samsung and SK Hynix. SK Hynix had a 69% drop in operating profits for Q1 FY2019, while Samsung witnessed its lowest quarterly profit in two years.
Fabless company Broadcom entered 2019 with good tidings. It was the only company with a positive quarter on quarter revenue growth in Q1 FY2019 at the rate of 19.7%. The company faced a tough 2018 with consistent quarter on the quarter decline in revenue following the order to block its US $117 million buyouts of Qualcomm. The company forecasted a similar scenario for the current year, by cutting the US $ 2 billion from its FY2019 revenue forecast. This revision was apparently based on the ban put forth by the U.S. Commerce Department on American dealings with Chinese smartphone manufacturer Huawei. Huawei was one of the largest customers for Broadcom and had spent the US $900 million with the company in 2018.
Trends in Revenue by semiconductor suppliers:
Toshiba Memory Holdings Corp. faced sluggish revenues with a decline of US $ 252 million in Q4 FY 2018 over the previous quarter. In the same year, the chips subsidiary was sold by Toshiba corporate to an investment consortium led by Bain Capital. This marked an effort by the company to turn over a new leaf after its acquisition of Westinghouse – a U.S based nuclear energy firm which resulted in billions of dollars in losses. The CEO announced he would scrap 7,000 jobs over the next five years and downgraded the company’s profit outlook for 2019.
The stock price of Texas Instruments (TI) doubled over 2016 and 2017, attributable to a strong performance in the automotive market. With a year over year revenue growth of 5.83% in 2018, the world’s largest analogue semiconductor supplier, expanded its lead in the analogue chip market with analogue sales of US $10.8 billion in the same year. Both TI and its rival the French-Italian multinational ST Microelectronics reported a dip in earnings in Q4FY2018 due to a softer market for chipsets.
Qualcomm’s earnings took a beating in the first and last quarters of 2018 with a negative quarter on the quarterly growth rate of 13.57% and 17.7% respectively. The company earns most of its revenues from selling smartphone chipsets, its major customer is Apple. The weakness in smartphone demands adversely affected the company. However, CEO Steve Mollenkopf expects better performance in 2019 due to the potential market for 5G
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* Billed annually, local taxes extra.
* Local taxes extra.