In view of the ongoing production capacity shortage in the semiconductor industry and the resultant price hike of chips, revenue of the top 10 IC design companies for 2Q21 reached US$29.8 billion, a 60.8% YoY increase, according to TrendForce‘s latest investigations. In particular, Taiwanese companies put up remarkable performances during this period, with both MediaTek and Novatek posting YoY growths of more than 95%. AMD, on the other hand, experienced a nearly 100% YoY revenue growth, the highest among the top 10.

TrendForce indicates that the ranking of the top five companies for 2Q21 remained unchanged from the previous quarter, although there were major changes in the 6th to 10th spots. More specifically, after finalizing its acquisition of Inphi, Marvell experienced a major revenue growth and leapfrogged Xilinx and Realtek in the rankings from 9th place in 1Q21 to 7th place in 2Q21.

Thanks to strong demand for major smartphone brands’ flagship and high-end 5G handsets, revenue leader Qualcomm’s processor and RF front-end businesses underwent remarkable growths, while its IoT business also benefitted from WFH and distance learning demands generated by the COVID-19 pandemic. Qualcomm’s revenue from its IoT business reached nearly US$1.4 billion, making IoT one of the major growth drivers for the company. For 2Q21, Qualcomm’s revenue reached US$6.47 billion, a 70.0% YoY increase. On the other hand, Nvidia’s revenues from gaming graphics cards and data center solutions each grew by 91.1% YoY and 46% YoY, respectively, in 2Q21. Strong demand from cryptocurrency miners for Nvidia’s high-end gaming graphics cards, along with the data center segment’s demand for Nvidia’s HPC products, propelled the company’s revenue for 2Q21 to US$5.84 billion, a 68.8% YoY growth, and secured the second place for Nvidia on the top 10 list.

Broadcom, which took third place on the top 10, attributed most of its revenue to wired connectivity and wireless products. Regarding wired connectivity products, the continued build-out of 5G base stations worldwide resulted in increasing demand for Broadcom’s high-speed Ethernet controller ICs, whereas for wireless products, the release of certain high-end 5G smartphones also created high demand for Broadcom’s Wi-Fi 6E chips. Similarly, Broadcom’s broadband and industrial solutions businesses both underwent double-digit growths in 2Q21, thereby driving the company’s revenue for 2Q21 to US$4.95 billion, a 19.2% YoY growth. Turning to AMD, the company’s revenue for 2Q21 reached US$3.85 billion, a staggering 99.3% YoY increase, owing to the following: first, the bullish gaming console market; second, massive earnings growths from enterprise, embedded, and semi-custom solutions; third, increased client adoption of AMD’s server CPUs (it should be noted that AMD’s server processor business grew by 183% YoY in 2Q21). AMD took fifth place in the top 10 list for 2Q21.

Regarding Taiwanese companies, MediaTek was able to sustain the momentum it gained in 1Q21 throughout 2Q21. MediaTek’s smartphone chip business, which generated the bulk of the company’s revenue, registered a 143% growth in 2Q21. At the same time, its revenues from other businesses also saw an overall double-digit growth. Hence, MediaTek posted a revenue of US$4.49 billion for 2Q21, a 98.8% YoY growth, and reached fourth place on the list. Finally, Novatek’s SoCs and display driver ICs both performed well in the market primarily due to its close partnerships with major foundries, including TSMC, UMC, and VIS. Revenue from display driver ICs, which had traditionally been Novatek’s primary revenue source, grew by 81% YoY in 2Q21.

Certain rumors in the end-devices markets indicate that demand will likely undergo a slowdown in 3Q21 and lead to decreased orders for certain components. However, given that foundries’ newly installed wafer capacities have yet to kick off mass production, the ongoing chip shortage is expected to persist for now. In addition, as some IC design companies’ client orders still remain unfulfilled, these companies’ revenues will likely experience further growths in 2H21, albeit to a relatively limited extent. It should also be pointed out that Marvell is expected to benefit from Inphi’s earnings for the next two quarters and increase its own revenue by more than 50% YoY in 2H21. Even so, Novatek’s sixth-place ranking is unlikely to be threatened by Marvell in the short run since Novatek will continue to benefit from the ongoing chip shortage and price hikes for the time being.

For more information on reports and market data from TrendForce’s Department of Semiconductor Research, please click here, or email Ms. Latte Chung from the Sales Department at lattechung@trendforce.com

While foundry capacities remained tight, prompting IC design companies to compete over limited foundry capacities in order to fulfill rising demand for various end devices, the top 10 IC designe (fabless) companies posted remarkable revenues in 1Q21, according to TrendForce’s latest investigations. In particular, thanks to the global mining craze brought about by the cryptocurrency market, Nvidia was able to surpass Broadcom in revenue and take the second spot among the top 10. On the other hand, fifth-ranked AMD scored a staggering YoY growth of 92.9%, which is the highest % increase on the top 10 list.

Market leader Qualcomm saw growths in its smartphone, RF front end, IoT, and automotive departments in 1Q21, during which it posted a revenue of US$6.28 billion, a 53.2% increase YoY, placing Qualcomm firmly in the number one spot. Coming in second place is Nvidia, which overtook Broadcom with $5.17 billion in revenue. Nvidia’s revenue performance can primarily be attributed to massive gaming graphics card demand generated by the cryptocurrency market and the stay-at-home economy. In addition, Nvidia’s Cloud & Data Center business also saw positive growths in 1Q21, thereby contributing to its revenue for the quarter as well.

Broadcom, ranked third on the top 10 list, posted a $4.49 billion revenue in 1Q21. Broadcom’s performance took place on the back of the bullish broadband telecom market, with growths in passive fiber optics and wired networking for data transmission. AMD, on the other hand, continued to benefit from the stay-at-home economy and other such market demands, in addition to its growing foothold in the server market. The company experienced increasing market shares and led its competitors with an impressive 92.9% YoY increase in revenue, the highest on the top 10 list. It should be pointed out that the extreme volatility of the cryptocurrency market, as well as the strict surveillance policies imposed on cryptocurrency trading by several countries, may introduce uncertainties in the future of gaming graphics card revenue for both Nvidia and AMD.

Regarding the performance of Taiwanese IC design companies, MediaTek’s smartphone business unit registered a remarkable 149% YoY growth in revenue mainly on account of high demand from Chinese smartphone brands, which were particularly aggressive in seizing Huawei’s former market share. Furthermore, as Qualcomm’s recent performance in the entry-level and mid-range smartphone markets remained relatively lackluster, MediaTek therefore aimed to fulfill demand from its smartphone clients as its chief goal on a macro level. As a result, MediaTek’s revenue for 1Q21 reached about $3.81 billion, an 88.4% YoY increase, placing the company in the fourth spot.

Novatek derived its performance from high component demand from manufacturers of IT products, TVs, and smartphones. In view of the current shortage of foundry capacity and rising prices of foundry services, Novatek has been able to maintain a stable supply of components via increased prices due to its longstanding, stable, and flexible strategic relationships with Taiwanese foundries (UMC, VIS, and TSMC), China-based Nexchip, and Korea-based Samsung LSI. Hence, Novatek leapfrogged both Marvell and Xilinx for the sixth place while increasing its revenue for 1Q21 by 59.4% YoY.

On the whole, the second wave of the COVID-19 pandemic in India, which has resulted in decreased production targets for Chinese smartphone brands, is not expected to drastically affect IC design companies’ component demand in 3Q21 because of the following factors: First, price hikes of foundry services have already been reflected in chip prices; secondly, market demand for devices remains high; and finally, Chinese smartphone brands still need to maintain a safe level component inventory, as they have yet to resolve the discrepancies among their various materials’ sufficiency levels.

Incidentally, although some expect that the recent spread of COVID-19 among KYEC employees may impact the procurement activities of IC designers that are part of KYEC’s clientele, TrendForce’s investigations of financial reports from various companies in April and May indicate that infections in KYEC facilities will unlikely result in major impacts on the revenues of IC designers in 2Q21.

For more information on reports and market data from TrendForce’s Department of Semiconductor Research, please click here, or email Ms. Latte Chung from the Sales Department at lattechung@trendforce.com

As infections among employees from semiconductor backend testing leader KYEC make news headlines, the company suspended operations for two days and undertook facility-wide disinfections starting on June 4, although at the moment KYEC’s facility has yet to resume operations at full capacity. In the vicinity of KYEC are packaging and testing operator Greatek and networking device manufacturer Accton, both of which have since been affected by the spread of the disease.

Not only have the confirmed cases in KYEC generated worries about possible disruptions to the semiconductor supply chain, but the semiconductor industry is also anxious about whether continued infections will spread to other semiconductor companies.

As a leading chip tester (as well as the 8^th largest IC package and testing companies globally), if KYEC were to halt its operations altogether due to the continued spread of COVID-19 infections, the semiconductor supply chain would be considerably impaired as a result. Not only would upstream clients (including fabless companies, IDMs, and foundries) have their schedules disrupted, but lead times of downstream end-products will be prolonged as well, causing far-reaching impacts throughout the entire semiconductor industry.

According to KYEC’s publicly disclosed information, the distribution of its clientele is as follows: fabless companies (76%), IDMs (22%), and foundries (2%). In particular, of the 50 largest semiconductor companies globally, more than 30 currently make use of KYEC’s testing services.

According to TrendForce’s latest investigations, the packaging and testing industry has been impacted in the short run by KYEC’s two-day suspension and low-capacity operation resumptions successively. As such, MediaTek, Novatek, and STMicroelectronics, which are major clients of KYEC, are all notably experiencing impacts from the spread of the pandemic within KYEC’s ranks.

Although the above companies have already transferred some of their orders to ASE, Sigurd, and ChipMOS to make up for disruptions in KYEC’s operations, these orders are too numerous to be fulfilled completely at the present. Therefore, the tight capacity of chip testing services is expected to intensify going forward.

（Cover image source: Pixabay）

The emergence of the COVID-19 pandemic in 1H20 seemed at first poised to devastate the IC design industry. However, as WFH and distance education became the norm, TrendForce finds that the demand for notebook computers and networking products also spiked in response, in turn driving manufacturers to massively ramp up their procurement activities for components. Fabless IC design companies that supply such components therefore benefitted greatly from manufacturers’ procurement demand, and the IC design industry underwent tremendous growth in 2020. In particular, the top three IC design companies (Qualcomm, Broadcom, and Nvidia) all posted YoY increases in their revenues, with Nvidia registering the most impressive growth, at a staggering 52.2% increase YoY, the highest among the top 10 companies.

According to TrendForce’s latest investigations, Qualcomm was able to overtake Broadcom for the leading position in the top 10 list primarily due to two reasons: First, the sudden demand surge for network devices; and second, Apple’s decision to once again adopt Qualcomm’s baseband processors. Incidentally, US sanctions against Huawei also prompted other smartphone brands to ramp up their production volumes in an attempt to seize additional market shares. Taken together, these factors collectively drove up Qualcomm’s revenue last year. Likewise, although the US-China trade war hampered Broadcom’s performances in 1H20, its smartphone RF front-end became a crucial part of Apple’s supply chain in 2H20. Even so, Broadcom fell to second place in the rankings, since its revenue growth was relatively minor. The Mellanox acquisition substantially bolstered the depth and breadth of Nvidia’s data center solutions, which generated nearly US$6.4 billion in revenue, a 121.2% increase YoY. Owing to its data center solutions and gaming graphics cards, which performed well in the market, Nvidia posted the highest YoY revenue growth among the top 10 companies, at 52.2% as previously mentioned.

The three Taiwanese companies delivered remarkable performances as well. In particular, MediaTek’s revenue underwent a 37.3% YoY increase in 2020, an overwhelming improvement over the 1% YoY increase in 2019. MediaTek’s growth last year took place due to several reasons, including the skyrocketing demand for notebooks and networking products, the success of MediaTek’s 5G smartphone processors, and improved specs as well as cost optimizations for MediaTek’s networking products. Novatek’s revenue grew by 30.1% YoY, as the US-China trade war and the stay-at-home economy brought about by the pandemic resulted in strong sales of its driver ICs and TV SoCs. Finally, Realtek benefitted from the high demand for its various offerings, most notably networking products and notebooks, although sales of its audio products and Bluetooth chips were also respectable. Realtek’s revenue increased by 34.1% YoY.

Capitalizing on the capacity limitations of Intel’s 10nm process, AMD made significant inroads in the notebook, desktop, and server CPU markets, resulting in a $9.7 billion revenue, a remarkable 45% increase YoY. Although Xilinx’s revenue declined by 5.6% YoY in the wake of the US-China trade war, recent QoQ changes in Xilinx’s revenue show that the company is well on its way to recovery going forward.

Although vaccines are being administered across the globe at the moment, the pandemic has yet to show any signs of slowdown in 1Q21. While device manufacturers remain active in procuring components, the shortage of foundry capacities is expected to persist throughout the year. IC design companies are likely to raise IC quotes given the need to ensure sufficient foundry capacities allocated to IC products, in turn propelling IC design revenue to new heights in 2021.

For more information on reports and market data from TrendForce’s Department of Semiconductor Research, please click here, or email Ms. Latte Chung from the Sales Department at lattechung@trendforce.com

Demand in the global foundry market remains strong in 1Q21, according to TrendForce’s latest investigations. As various end-products continue to generate high demand for chips, clients of foundries in turn stepped up their procurement activities, which subsequently led to a persistent shortage of production capacities across the foundry industry.

TrendForce therefore expects foundries to continue posting strong financial performances in 1Q21, with a 20% YoY growth in the combined revenues of the top 10 foundries, while TSMC, Samsung, and UMC rank as the top three in terms of market share. However, the future reallocation of foundry capacities still remains to be seen, since the industry-wide effort to accelerate the production of automotive chips may indirectly impair the production and lead times of chips for consumer electronics and industrial applications.

TSMC has been maintaining a steady volume of wafer inputs at its 5nm node, and these wafer inputs are projected to account for 20% of the company’s revenue. On the other hand, owing to chip orders from AMD, Nvidia, Qualcomm, and MediaTek, demand for TSMC’s 7nm node is likewise strong and likely to account for 30% of TSMC’s revenue, a slight increase from the previous quarter. On the whole, TSMC’s revenue is expected to undergo a 25% increase YoY in 1Q21 and set a new high on the back of surging demand for 5G, HPC, and automotive applications.

In response to increased client demand for 5G chips, CIS, driver ICs, and HPC chips, Samsung will continue to raise its semiconductor CAPEX this year, which is divided between its memory and foundry businesses and represents Samsung’s desire to catch up to TSMC. With regards to process technologies, the Korean company’s capacity utilization rates for the 5nm and 7nm nodes have been relatively high in 1Q21, during which Samsung is expected to increase its revenue by 11% YoY.

In addition to chip demand from the automotive sector, UMC has been keeping up with manufacturing driver ICs, PMICs, RF front-end, and IoT products. The company’s capacity thus remains fully loaded in 1Q21, and UMC is expected to undergo a 14% YoY increase in revenue. GlobalFoundries is similarly experiencing high capacity utilization rates due to the increase in automotive chip demand, as well as the military chips that it has been manufacturing for the U.S. Department of Defense. GlobalFoundries’ revenue is expected to increase by 8% YoY in 1Q21.

SMIC’s revenue for the 14nm and below nodes is expected to decline in 1Q21 as the company was added to the Entity List by the U.S. and subsequently faced constraints in the development of advanced processes. However, with the persistent demand in the foundry market for mature processes above (including) the 40nm node, SMIC’s revenue is projected to stay on a positive trajectory and reach a 17% YoY increase in 1Q21. TowerJazz will spend about US$150 million on a small-scale capacity expansion, but equipment move-in and calibrations will not be finalized until approximately 2H21, after which the expanded capacity will start measurably contributing to the company’s revenue. In 1Q21, TowerJazz’s revenue is expected to be on par with the previous quarter while reaching a 15% increase YoY.

PSMC is primarily focused on manufacturing memory products, DDICs, CIS, and PMICs. At the moment, high demand for 8-inch and 12-inch wafer capacities and for automotive chips has resulted in fully loaded capacity for PSMC. The company’s revenue is expected to increase by 20% YoY in 1Q21. Likewise, VIS’ capacity is fully loaded across all of its process technologies. Driven by increased spec requirements for PMICs and small-sized DDICs, VIS’ revenue is expected to increase by 26% YoY in 1Q21. Finally, Hua Hong is currently placing considerable emphasis on expanding the 12-inch capacity of HH Fab7 in Wuxi. Process technologies for 12-inch production lines, including NOR, BCD, Super Junction, and IGBT, have all passed qualifications, thereby injecting fresh momentum into Hua Hong’s development. Furthermore, given Hua Hong’s fully loaded 8-inch capacities and the fact that its performance in 1Q20 represents a relatively low base period for YoY comparison, Hua Hong’s revenue may likely reach a 42% YoY increase in 1Q21.

For more information on reports and market data from TrendForce’s Department of Semiconductor Research, please click here, or email Ms. Latte Chung from the Sales Department at lattechung@trendforce.com