Foundries, fabless suffer in 2018 ranking
That is, if we judge from the performances of fabbed, fabless and foundry vendors of semiconductor chips in the latest ranking from IC Insights. If we modify the quote to make it gender inclusive it could be said that in 2018 – with only one or two exceptions – real executives have fabs.
In 2018 the fastest growing chip companies will include fabbed companies Samsung, SK Hynix, Micron with estimated annual growth of 26, 41 and 33 percent, respectively. The worst performing companies are each side of the foundry-fabless partnership; TSMC, Broadcom and Qualcomm, with growth of 6, 4 and minus 3 percent respectively.
Top 15 semiconductor companies by forecast 2018 sales ($M, including foundries). Source: IC Insiights.
The fabbed companies are benefitting from strong demand and selling prices for DRAM and NAND flash memory, although that cycle appears to be coming to an end in 4Q18.
This is illustrated by IC Insights analysis of Samsung’s performance. Memory devices are forecast to represent 84 percent of Samsung’s semiconductor sales in 2018, up three points from 81 percent in 2017 and up 10 points from 71 percent in 2016. The company’s non-memory sales in 2018 are expected to be only $13.3 billion, up 6 percent from 2017’s non-memory sales level of $12.5 billion. In contrast, Samsung’s memory sales are forecast to be up 31 percent this year and reach $70.0 billion.
One exception to the “real executives” rule is fabless Nvidia Corp., which is expected to increase revenue by 37 percent driven by its success selling GPUs into machine learning applications within data centers.
Similarly some fabbed companies are not expected to perform that well. Texas Instruments with growth of just 8 percent and image sensor provider Sony down at 2 percent.
Next: Middle-ranking characteristics
Some companies in the middle ground include Intel, ST and Infineon with growth of 14, 16 and 14 percent respectively. Intel is fabbed but has had well documented problems in getting its 10nm FinFET manufacturing process up and running. Intel’s dominant position in PC ecosystem has kept it afloat. And while European chip companies STMicroelectronics, Infineon and NXP do have fabs they are strong examples of the fab-lite approach which may also explain their midde-ranking growth performance.
In total, the top 15 semiconductor companies’ sales are forecast to rise by 18 percent in 2018 compared to 2017, two points higher than the expected total worldwide semiconductor industry 2018/2017 increase of 16 percent.
Sanders made his original remark back in the early days of rise of the foundry-fabless business model – and in part as a push back against it. But eventually the company he had led as CEO, Advanced Micro Devices, went fabless.
But one notable feature of this ranking is how poorly TSMC is expected to perform, showing only 6 percent growth. This may seem suprising particularly with successful 16nm and 10nm processes in play and 7nm manufacturing process ramping rapidly. It reflects how dependent TSMC has become on the smartphone market, which is itself largely saturated and showing declining selling prices for key components.
Related links and articles:
News articles:
Sony, ST increase image sensor market share
Broadcom overtakes Bosch to top MEMS vendor ranking
Infineon eclipses ST in industrial chip vendor ranking
IC Insights doubles forecast for chip market growth
AMD surges in fabless chip firm ranking
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