Nvidia, ST gate-crash memory party in chip sales
Seven companies had 20 percent of greater growth in 1H18 when compared with 1H17 nd these were the five memory companies – Samsung, SK Hynix, Micron, Toshiba/Toshiba Memory, and Western Digital/SanDisk – joined by graphics chip vendor Nvidia and broadline chip supplier STMicroelectronics.
Only four companies shows single-digit percentage growth and these were: Broadcom, Qualcomm, NXP and MediaTek. The third European chip company in the top 15 ranking was Infineon, which enjoyed 18 percent growth. As none of NXP, STMicroelectronics and Infineon are memory suppliers they could not match the average growth of the top 15 vendors of 24 percent which was dragged high by the memory sales.
Top 15 chip vendors ranked by 1H18 sales ($ millions) including foundries. Source: IC Insights.
Nonetheless Infineon, ST performed creditably. Nvidia is thought to have benefited from demand for GPUs for use in cryptocurrency mining applications.
IC Insights ranking is unusual in that it includes foundry TSMC, which sells to fabless chip companies, thus allowing a certain amount of double counting of sales. If TSMC were excluded from the top-15 ranking, IC Insights says U.S.-based Apple would have been ranked in the 15th position. Apple is also an anomaly in that if designs and uses its processors only in its own products. IC Insights estimates that Apple’s ARM-based SoC processors and other custom devices had a sales value of $3.5 billion in 1H18.
Next: Toshiba’s special circumstances
Toshiba is also an exceptional case that has benefited from the strong average sales prices (ASPs) for memory chips but also been the subject of the $18 billion sale of its memory IC business to a consortium led by Bain Capital but in which Toshiba retains a 40.2 percent share.
The plan of record is for the new company to stage an initial public offering of shares within three years and Bain has said it plans to support the business in pursuing acquisitions, including potentially large deals. As a result the Toshiba 1H18 sales include sales of the remaining semiconductor products at Toshiba and Toshiba Memory’s NAND flash sales.
Intel was still the number one chip supplier in 1H17 but has lost that position to Samsung in 2017 and in 1H18.
Samsung is a good example of the contrast between memory and logic in the current chip marketplace. Due to the surge in the memory market Samsung has gone from 1 percent more total semiconductor sales than Intel in 1H17 to having 22 percent more semiconductor sales than Intel in 1H18. Samsung’s non-memory sales in 2018 are expected to be $13.5 billion, up 8 percent from 2017’s non-memory sales level of $12.5 billion, while Samsung’s memory sales are forecast to be up 31 percent in 2018 to reach $70.0 billion.
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