IC Insights has released its annual semiconductor rankings for 2020, and frankly they’re pretty interesting this year. At the top of the market there’s Intel, with an estimated $74.894B in revenue this year, a 4 percent growth from 2019. That’s robust growth for Intel considering that the company is still working through its CPU shortage. Samsung is in #2, though the company’s yearly revenue fluctuates based on the NAND flash market (Samsung topped the charts in 2018 but lost to Intel in 2019 and 2020).
The big movers of the report are TSMC, Qualcomm, Nvidia, MediaTek, and AMD — though the major gains reported by Kioxia, Apple, and SK Hynix would be headline news in their own right in any regular year. I’m not quite as familiar with the Qualcomm or MediaTek revenue jumps, but if I had to guess, I’d guess they’re being driven by 5G adoption at least a bit, and by the overall impact of the coronavirus pandemic. The pandemic has been brutal for any number of industries, but it’s driven semiconductor sales in multiple product categories straight through the roof.
IC Insights predicts that the market will grow 13 percent this year, more than double its initial prediction at the end of 2019. In 2019, the value of the collective semiconductor market had declined 15 percent, though a fair chunk of this was Samsung-specific. In 2020, that decline is expected to almost completely reverse, with a somewhat different set of beneficiaries.
There are some company-specific interesting takeaways here. First, Nvidia is having an absolutely banner year. The company’s years-long investment into markets like machine learning and artificial intelligence have paid off. TSMC’s 7nm node is going great guns and generating tremendous profits; foundry revenue leapt 31 percent this year, largely driven by sales to HiSilicon and Apple.
AMD showed a massive 41 percent growth in estimated revenue in 2020 on the backs of its highly successful Ryzen, Ryzen Mobile, Epyc, and Threadripper product lines. AMD’s Ryzen 5000 series is currently difficult to find on store shelves and the CPUs offer excellent performance. Apple has entered the market based on IDC’s estimate of the value of the company’s IC products in 2020.
There’s been a lot of talk about whether Intel can afford to stay in the foundry business based on the cost of operating its own fabs. Intel, of course, has always insisted that its fabs are critical to its revenue strategy. This has been objectively true — it was only after a massive stumble on Intel’s part that this strategy even became plausible. Despite these issues, Intel is objectively correct to point out that owning its own fabs has worked out fabulously well for the company for most of its existence. Intel ships a fraction of the processors that TSMC does every year, yet it earns far more revenue.
The companies that are challenging Intel are still a fraction of the firm’s size. Add AMD to Nvidia, and you’d still have to triple the value of the two firms to make one Intel. The fact that Intel has already discussed moving to another foundry for leading-edge production means the company is considering radically different paths for its future, but there’s no arguing that Intel’s fab ownership has worked quite well for most of its existence.
We haven’t seen projections for 2021 yet, and much likely depends on vaccine approval and rollout timelines. Assuming that it takes until the middle of the year to get everyone vaccinated, the trends that have been driving the industry this year might abate by the middle of next. I’d be surprised if they went away entirely, however. A lot of companies have been forced to suddenly adopt digital payment technologies and automatic ordering hardware, and those trends shouldn’t vanish when the pandemic does. Some of this growth represents a new normal, not a temporary surge.
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