Semiconductors Global Market

Key players

The U.S. and China are worried about Taiwan and South Korea's lead in semiconductor manufacturing. The U.S. accounted for just 12% of semiconductor capacity in 2020, while Taiwan and South Korea combined provided 43%, according to a report released in September 2020 by the Boston Consulting Group (BCG) and the Semiconductor Industry Association (SIA).

Market segments

Processors (Global Market)

Main Article: Processors (Global Market)

Industrial chips

Main article: Industrial chips

Analog chips

Analog chips are used to measure sound, temperature, etc., and then convert this data to digital format.

Main article: Analog chips

Automotive Chips and Electronics

Main article: Automotive electronics (On-board computers of cars)

Chips for IoT devices

Main article: Chips for IoT devices

Baseband chips (modems)

Main article: Modems (baseband chips)

Chip Manufacturing Equipment Market

• Chip Manufacturing Equipment (Global Market)

Semiconductor materials

Main article: Semiconductor materials

Chip sales in selected regions of the world

Semiconductors in Russia

Main article: Semiconductors (Russian market)

Semiconductors in the United States

Main Article: Semiconductors (US Market)

Semiconductors in Europe

Main article: Semiconductors (European market)

Semiconductors in China

Main article: Semiconductors (China market)

Semiconductors in India

Main Article: Semiconductors (Indian Market)

Semiconductors in Italy

Main article: Semiconductors (Italian market)

2024: Investment in the development of the semiconductor industry

2023

The leader among the world's largest companies that develop chips but do not produce them has changed

In 2023, the leader among the world's largest companies that develop chips but do not produce them was replaced. In first place in terms of revenue came out with an income Nvidia of $55.27 billion, which is 105% higher than in 2022. The company's share in this market grew from 18% to 33% over the year. Such data are provided in a study that TrendForce analytical agency released in mid-May 2024.

According to analysts, Nvidia is the leader in the global market for hardware accelerators for artificial intelligence systems, controlling about 80% on it. The boom around AI-technology contributed to the financial rise of the company. Nvidia's main product in this market is graphics. In processor H100 2024, the release of the H200 line is expected, which should additionally spur the growth of the company's revenues, experts say.

Qualcomm is in second place in terms of revenue from chip sales among their developers who do not have their own production facilities at the end of 2023. In 2022, the American company was in the lead, but in 2023 its revenue decreased by 16%, and the market share - from 24% to 18%. This decline was the result of weak demand for mobile devices Internet and equipment of things. In addition, the fall in the volume of the Chinese market smartphones in 2023 to a 10-year low affected.

Under these conditions, Qualcomm decided to pay more attention to the more growing segments to which the company classifies car chips. The company predicts that by 2030, its revenue from vehicle chip sales will double from 2023.

Broadcom retained the third place in the list of the largest faceless chipmakers in 2023, which was able to increase market revenues by 7% while reducing its share from 18% to 17%. About 15% of Broadcom's revenue in the semiconductor industry comes from shipments of artificial intelligence solutions. Despite solid sales of wireless chips, Broadcom expects a near double-digit decline in new broadband and server storage connections in 2024.

Like Broadcom, AMD, MediaTek and Marvell retained market positions in 2023. At the same time, AMD and MediaTek revenue for the year decreased by 4% and 25%, respectively. Marvell's turnover sank 7%.

Like Qualcomm, the finances of Taiwanese chipmaker MediaTek have been affected by falling demand from smartphone manufacturers. Among the main reasons for the reduction in revenue from the supplier of computer microprocessors and graphics solutions AMD, analysts called the decrease in the demand for PCs and the adjustment of inventory from partners.

In the top group, Realtek saw the biggest revenue decline (down 19% in 2023), sending it down from 7th to 8th overall. The decline was mainly due to a sharp reduction in PC supplies, the suspension of telecommunications tenders in China and the early write-off of stocks. However, after the devastation of warehouses, Realtek noted a slight improvement in the supply of chips for PC and cars in the first quarter of 2024, but a drop in shipments of solutions for network devices and household appliances remained.

According to TrendForce estimates, the total revenue of the 10 largest chip developers who do not have their own production sites in 2023 increased by 12% compared to 2022 and exceeded $168.64 billion. Given the improving situation in the semiconductor industry and the high interest in artificial intelligence from electronics manufacturers and software developers, TrendForce predicts further revenue growth in the industry.^[1]

TSMC is the new leader in the global semiconductor market

At the end of 2023, TSMC became the largest supplier of semiconductor products on a global scale with revenue of $69.28 billion. A year earlier, this Taiwanese enterprise ranked second in the global ranking, and sales were higher - $75.85 billion. Thus, on an annualized basis, TSMC revenue decreased by about 9%, as stated in the TechInsights study, the results of which were released on April 17, 2024.

Analysts note that the global semiconductor industry in 2023 faced a number of difficulties due to the formed macroeconomic situation, high inflation and market uncertainties. The number of orders for the release of products in certain categories decreased due to the formation of inventory. In addition, memory chip manufacturers have faced a sharp decline. On the other hand, amid the rapid development of artificial intelligence technologies, sales of GPU-based accelerators (GPUs), as well as specialized accelerators, have jumped. In such conditions, the largest operators of cloud platforms and data centers faced a shortage of AI solutions, and the deadlines for fulfilling orders for the supply of AI servers stretched for months. It is noted that in 2023, a stable sales volume was observed in the automotive segment, where the introduction of autopilot technologies continues.

Global Chip Market Leaders

The TechInsights report said that the Top 25 largest suppliers of semiconductor products in 2023 included 13 companies headquartered in the United States. Three more enterprises are based in Europe, Japan and Taiwan; two in South Korea and one in China.

In the second position of the rating in 2023 is Intel, which showed revenue of $51.51 billion. A year earlier, this corporation occupied the third line with sales at $60.1 billion. Over the year, Intel's revenue decreased by about 14%. The South Korean Samsung closes the top three, which in 2022 was the leader: sales from the company decreased by 34% year-on-year - from $76.85 billion to $50.9 billion. Samsung's semiconductor business has been hit hard by a significant downturn in the memory segment.

The fourth line of the Top 25 ranking is occupied by Nvidia, which showed the most significant growth among all companies on the list - plus 102% on an annualized basis. If in 2022 the company's sales were estimated at $24.5 billion, then in 2023 they reached $49.62 billion. Nvidia won thanks to its accelerators for AI systems, such as powerful N100 generation Hopper cards, which are also used to teach large language models. Due to the huge demand, the delivery time of the N100 reached 52 weeks. The shortage of these products provoked delays in the shipment of AI equipment for data centers. However, by the end of 2023, the shortage of Nvidia GPU-based accelerators began to weaken.

Qualcomm closes the top five largest players in the global semiconductor market with sales of $30.91 billion against $36.72 billion a year earlier. This corresponds to a drop of about 16%. The top ten also included Broadcom, SK Hynix, AMD, Infineon Technologies and STMicroelectronics.

In general, the revenue of the ten leading suppliers of semiconductor products in 2023 amounted to approximately $364.46 billion, which is 7% less than the result of the previous year (approximately $391.03 billion). All 25 companies from the rating sold products worth about $524.55 billion: this is 9% less than in 2022, when sales were estimated at $578.01 billion.^[2]

Market drop 9% to $544.8 billion

At the end of 2023, the global semiconductor market amounted to approximately $544.8 billion. This is 9% less compared to 2022, when costs were estimated at $597.7 billion. Such data are reflected in the Omdia study, the results of which were released on March 28, 2024.

The industry's recorded contraction followed two years of record growth, which the report noted reflected the cyclical nature of the semiconductor market. In 2023, despite the overall decline in the semiconductor industry, artificial intelligence became an important growth driver, and companies developing related products such as Nvidia are strengthening their positions.

The prolonged rise that began in the era of COVID-19 has ended. After a sharp increase in demand for semiconductor products during the pandemic, which led to a shortage in the market, the situation changed. Demand has declined due to macroeconomic factors, while supply chain performance has improved, "comments Cliff Leimbach, senior analyst at Omdia.

In addition to GPU-based accelerator (GPU) suppliers, high-bandwidth memory (HBM) manufacturers benefit from the rapid development of the AI industry. SK Hynix is leading in this segment, and competition is intensifying. The memory market as a whole saw a decline in 2023, while the HBM sector saw 127% growth from the previous year in terms of capacity. Omdia believes that HBM will show higher growth rates in 2024 - in the range of 150-200% and is expected to contribute to the growth of the memory market as a whole.

In 2023, the automotive segment had a significant impact on the semiconductor industry, showing revenue growth of more than 15% on an annualized basis: the figure exceeded $75 billion. This is facilitated by the growth of the number of electric vehicles and the integration of AI tools into the transport infrastructure. According to the results of 2023, the automotive sector accounted for about 14% of the total semiconductor product market.

The largest player in the industry in 2023 was Intel Corporation with revenue of approximately $51.2 billion: this is 15.8% less than in 2022, when the figure was $60.81 billion, and Intel itself ranked second in the ranking. Nvidia climbed to the second line from the eighth, with annual revenue soaring by 133.6% - from $21.05 billion to $49.16 billion. Samsung closes the top three, which in 2022 was the market leader: its sales on an annualized basis decreased by 33.8% - from $67.06 billion to $44.37 billion.

Nvidia's rapid growth in semiconductor revenue made it the second-largest company by revenue in 2023 - second only to Intel. Samsung, the industry leader in 2022, dropped to third place in 2023 as its revenues from memory supplies almost halved from 2021 levels, Leimbach notes.

The decline especially affected large memory manufacturers, traditionally among the leading semiconductor companies in terms of sales. So, in the period from 2017 to 2021, Samsung, SK Hynix Micron Technology were among the five largest companies in terms of revenue. However, in the current market situation, SK Hynix was in sixth place at the end of 2023, and Micron Technology was in 12th place. The top ten, as noted in the study, includes,, Qualcomm,, and Broadcom AMD. Apple Infineon Technologies STMicroelectronics^[3]

8.2% reduction in the global market to $526.8 billion

Chip sales on a global scale in 2023 reached $526.8 billion, which is 8.2% less than a year ago ($574.1 billion). This was reported in the Semiconductor Industry Association (SIA), which includes about 99% of American chipmakers and almost two-thirds of chipmakers outside the United States.

Global semiconductor sales were sluggish in early 2023, but rebounded sharply in the second half of the year, and double-digit market growth is forecast in 2024, says SIA President and CEO John Neuffer. - With chips playing a bigger role in the myriad products on which the world depends, the long-term outlook for the semiconductor market is very optimistic. State support for R&D, strengthening personnel capacity in the field of semiconductors and reducing trade barriers should help the industry continue to grow and innovate for many years to come.

Chip sales globally reached $526.8 billion in 2023, down 8.2% from a year ago

The volume of the global semiconductor market in 2023 decreased in almost all regions except Europe, where an increase of 4% was recorded. In the Americas, the volume of the semiconductor industry in 2023 decreased by 5.2% compared to 2022, in China - by 14%, in Japan - by 3.1%, in Asia-Pacific - by 10.1%.

According to SIA, in 2023, memory chip sales amounted to $92.3 billion. The microcontroller segment grew by 11.4% to $27.9 billion. Sales of automotive chips increased by 23.7%, to a record $42.2 billion.

According to analysts at Counterpoint Research, the volume of the chip market in 2023 in money decreased by 8.8% and amounted to $521.3 billion. Only six of the top twenty semiconductor companies managed to generate revenue growth, according to the study. As a result, there were noticeable permutations in the rating of chipmakers compared to the previous year, the researchers add.^[4]

The leader has changed in the global chip market

At the end of 2023, revenue from the production of semiconductor products on a global scale amounted to approximately $533.03 billion. This is 11.1% less than in 2022, when the volume of the industry was estimated at $599.56 billion. Such figures are provided in the Gartner report, published on January 16, 2024.

Analysts say 2023 has been a difficult year for the semiconductor industry. This is due to the difficult macroeconomic situation, a high level inflations and a reduction in the IT budgets of corporate customers. Memory chip revenue collapsed 37% in 2023, the most significant decline of any semiconductor product category. In particular, sales of RAM DRAM decreased by 38.5% compared to 2022 - to $48.4 billion, while NAND flash memory brought in $36.2 billion, which is 37.5% less on an annualized basis.

Smartphones, personal computers and servers - the three largest segments of DRAM and NAND - faced weaker-than-expected demand and excess inventory in sales channels, especially in the first half of 2023, says Joe Unsworth, vice president of analytics at Gartner.

In segments not related to memory chips, a drop in revenue was also recorded, but it turned out to be not so significant - at the level of 3%. One of the main drivers of the semiconductor product market in 2023 was artificial intelligence. Data center operators and cloud providers have actively purchased GPU-based accelerators and specialized accelerators to support resource-intensive AI workloads and handle large language models. In addition, the automotive sector (especially the electric vehicle segment), defense and aerospace industries showed good results in 2023.

In 2023, the leader changed in the global ranking of leading suppliers of semiconductor products: the South Korean company Samsung Electronics lost the palm to the American corporation. Intel At the end of 2023, Intel's revenue from the supply of semiconductor chips amounted to $48.66 billion, which corresponds to a share of 9.1%. For comparison: a year earlier, deliveries were estimated at $58.44 billion. Thus, on an annualized basis, a decline of 16.7% was recorded Samsung. is in second place with revenues of $39.91 billion and 7.5% of the global industry. Compared to 2022, sales from this company collapsed by 37.5%. Closes the top three, Qualcomm which received $29.02 billion - 5.4% in the total market volume. On an annualized basis, shipments of Qualcomm products decreased by 16.6%.

The top ten market players also included Broadcom (4.8%), Nvidia (4.5%), SK Hynix (4.3%), AMD (4.2%), STMicroelectronics (3.2%), Apple (3.2%) and Texas Instruments (3.1%). All other suppliers collectively occupied 50.7% of the industry. In the top ten, the most significant positive dynamics was demonstrated by Nvidia, whose sales in 2023 soared by 56.4% compared to 2022 - from $15.33 billion to $23.98 billion. This is due to the rapid growth in demand for AI accelerators. In addition, Broadcom and STMicroelectronics showed an increase - by 7.2% and 7.7%, respectively.

Gartner notes that in 2023, the total revenue of the 25 largest suppliers of semiconductor products amounted to 74.4% of total sales. For comparison: a year earlier, this value was 77.2%. Only 9 of the 25 largest market players in 2023 reported revenue growth. At the same time, 10 companies from this list had a double-digit decrease in income.^[5]

Named 8 main trends in the chip market in 2024

Factors such as the rapid development of the artificial intelligence industry, the demand for high-performance computing (LDC), the stabilization of demand for smartphones and personal computers, as well as the steady growth of the automotive industry will contribute to the strengthening of the global semiconductor product market in 2024. This is stated in the IDC study, the results of which were published on December 21, 2023. Analysts highlight eight main trends in the microchip market.

1. The volume of the semiconductor products industry will grow by 20% in 2024

At the end of 2023, revenue from the sale of microchips on a global scale, according to IDC estimates, will decrease by about 12% compared to the previous year. At the same time, the decline in the memory segment will exceed 40%. In 2024, the growth, according to analysts, will be more than 20% against the background of an increase in prices for products in certain categories, as well as due to the demand for expensive NVM memory.

2. Automotive Systems Market Development

Increasing demand for microchips in general is driven by the increasing adoption of advanced driver assistance systems (ADAS) and next-generation on-board infotainment systems. In these areas, the CAGR (compound percentage CAGR) to 2027 is expected at 19.8% and 14.6%, respectively. As a result, such products in 2027 will account for 30% and 20% of total revenue in the field of automotive microchips.

3. AI in the field of personal electronic devices

In 2024, IDC believes, AI technologies will be actively introduced into various personal user devices. Among them are smartphones, wearable gadgets and computers. And this will lead to an increase in the need for microchips with AI functions.

4. Asia-Pacific growth

As the market situation stabilizes, Asia Pacific microchip sales are expected to increase by 14% in 2024 compared to the previous year. Chip companies continue to actively develop technologies by introducing AI into client devices and automotive equipment.

5. Increase demand for advanced manufacturing processes

In 2023, the work of semiconductor products enterprises was seriously affected by inventory correction and weak demand. As a result, capacity utilization has decreased significantly, especially for mature processes. In 2024, against the backdrop of market recovery and a large need for AI chips, demand for microchip manufacturing services is expected to grow - primarily for the most advanced technologies.

6. Growth in China's production capacity

Under sanctions from the Chinese USA authorities, they are actively stimulating the development of their own semiconductor industry. It is predicted that in 2024 this will have an impact on the work of foreign enterprises for the production of semiconductor products.

7. Integrated Circuit Enclosure

As the functionality and performance requirements of semiconductor chips continue to increase, advanced packaging technologies are becoming increasingly important. The 2.5/3D chassis market is expected to demonstrate a CAGR of 22% between 2023 and 2028.

8. Growing demand for CoWoS packaging of chips

IDC believes that in 2024, due to the rapid expansion of the global AI market, the demand for chip packaging services using the CoWoS (Chip on Wafer on Substrate) method will significantly increase. The demand for packaging using CoWoS technology is increasing from Nvidia and other industry participants designing AI chips.^[6]

The global chip market has dropped sharply to $534 billion. Schedule

At the end of 2023, revenue from the supply of semiconductor products on the world market is estimated at $534 billion. For comparison, in 2021 the figure was $598 billion, and in 2022 - $600 billion. Such figures are given in a study by Gartner, the results of which were published on December 4, 2023.

Analysts note that the rapid development of artificial intelligence, including generative services (GenAI), as well as the growing demand for high-performance computing (LDCs) are increasing the need for specialized hardware solutions such as GPU-based accelerators (GPUs). However, in 2023, sales of such products could not compensate for the decline in the chip market as a whole. Gartner records a reduction in the supply of smartphones and personal computers, while hyperscalers and data center operators, amid macroeconomic difficulties and the crisis, reduce the cost of developing their infrastructures. All this leads to a fall in the global market for semiconductor products.

In 2022, the industry showed year-on-year growth of about 0.2%, but in 2023 there was a sharp decline - minus 10.9% in monetary terms. In the segment of memory chips in 2023, there was a decrease in revenue by 38.8% on an annualized basis. This is due to overproduction, the accumulation of large stocks and falling prices. Thus, in the NAND flash memory segment, sales at the end of 2023 decreased to $35.4 billion, which is 38.8% less than the result for the previous year. At the same time, Gartner experts believe that the cost of NAND products may reach its minimum value by the end of the first or second quarter of 2024.

As economic headwinds persist, weak demand for electronics is seen in both the consumer and corporate segments, creating an uncertain investment environment. In addition, the oversupply in the chip market leads to increased inventory and lower chip prices, says Gartner Vice President Richard Gordon.

However, as noted in the study, the development of GenAI platforms and large language models creates conditions for growth in the long term. Data center operators need next-generation high-performance servers based on GPU cards and specialized accelerators that help not only increase the speed of processing AI tasks, but also reduce power consumption, and therefore reduce total cost of ownership. According to Gartner, in the context of the rapid development of neural networks and machine learning by 2027, more than 20% of new servers in data centers will be equipped with accelerators to solve AI problems.

Analysts believe that in 2024 the global semiconductor products industry will begin to recover. Its volume will reach $624 billion, which will correspond to an increase of 16.8% compared to 2023.

At the same time, the memory segment will show an increase of 66.3% year-on-year. In the NAND sector in 2024, supplies will rise on an annualized basis by 49.6%, reaching $53 billion. DRAM chip sales will increase by 88%, amounting to approximately $87.4 billion.

Gartner notes that in the future, AI will continue to stimulate sales of semiconductor chips. The survey of 1,400 senior executives found that 55% of organisations are testing or using GenAI tools in some form as of September 2023. According to estimates, the global chip market in 2025 will reach $721 billion, which will correspond to an increase of about 15.5% compared to the previous year.^[7]

Armenia becomes the fourth largest exporter of semiconductors for the defense industry in the world

On July 28, 2023, it became known that Armenia it became the fourth largest exporter of semiconductor products for the defense industry in the world. Russia More. here

Overview of countries' strategies in the development of chip production

The United States, the EU, China, India, and the Republic of Korea are actively allocating significant financial resources for ambitious long-term projects and are searching for effective industry management policies. The focus is on three main areas: localization of production in the national territory; access to the latest technologies and strengthening positions in production chains; qualified personnel. Read more about the strategies of these countries (as well as Taiwan and Great Britain) in the development of chip production in an article published based on the review prepared by the Center for Global IT Cooperation in July 2023.

Launch of new factories by region of the world: China and Taiwan are among the leaders

Chip sales fell 18.5% to $41.33 billion in January

Global chip sales in January 2023 fell 18.5% to $41.33 billion compared to $50.74 billion a year earlier, the Semiconductor Industry Association, SIA, said.

2022

Global semiconductor industry slowdown to 4% by Q4

After the rapid growth of the world semiconductor industries by 25% in 2021, the growth forecast in 2022 by 13-14% by the fourth quarter slowed down to 4%. Rising interest rates, high, inflation declining consumer confidence and a downturn in the stock market have reduced the market capitalization of the world's 10 largest chip companies by 34% from $2.9 trillion in November 2021 to $1.9 trillion in November 2022^[8] Learn more here.

The volume of the global market for chips for AI for the year is estimated at $44.22 billion

At the end of 2022, the global market for microchips intended for use in artificial intelligence and machine learning systems reached $44.22 billion. This is stated in the Gartner study, the results of which were released on August 22, 2023.

Analysts note that the rapid development of generative AI, as well as services based on this technology, leads to an increase in demand for graphics accelerators and specialized chips. Against this background, the need for AI servers is increasing - this is a relatively new category of systems for data centers that use accelerators and semiconductor solutions with fast memory. According to Alan Priestley, vice president of analytics at Gartner, the current situation is stimulating an increase in the production of AI chips, despite the fact that the development of the IT industry as a whole has slowed down due to the current macroeconomic situation and the crisis.

Gartner notes that as new AI-based workloads are implemented, more companies and organizations will deploy systems built with specialized microchips and accelerators. As a result, the supply of such products will continue to grow steadily. In particular, analysts believe that by the end of 2023, the market volume will be $53.45 billion, which will correspond to an increase of 20.9% compared to 2022. In 2024, experts say, the costs will reach $67.15 billion - plus 25.6% compared to the previous year.

According to the study, the demand for AI processors is increasing in various industries. In the consumer electronics segment, in 2022, the cost of chips with artificial intelligence amounted to approximately $558 million. In 2023, according to Gartner experts, costs will rise to $1.2 billion, that is, they will more than double.

It says the need for resources to efficiently execute AI-related workloads will accelerate the adoption of specialized chips optimized for relevant tasks. Priestley notes that this trend will be especially noticeable in the field of generative AI and large language models. In the short term, large data center operators and hyperscalers will continue to purchase GPU-based systems. However, in the long term, analysts say, the use of specially designed artificial intelligence chips is expected to expand. Such chips will not only increase performance, but also reduce power consumption.

The main customers of AI servers are leading cloud platform operators: they include Amazon Web Services (AWS), Google Cloud and Microsoft Azure, as well as large Chinese sites. These companies are forced to constantly increase computing resources to meet the needs of customers who are actively developing projects in the field of AI. Foxconn Chairman Liu Yangwei believes that by the end of 2023, global costs for AI servers will amount to approximately $30 billion. In 2027, according to analysts' forecasts, this value will reach $150 billion, which will correspond to fivefold growth. At the same time, Gartner believes, in 2027, AI chips will bring revenue to suppliers in the amount of $119.4 billion.

The reality is that the development of generative AI does not stop. There is a pressing need for a new class of tools to manage data flows between users and companies, adds Avivah Litan, vice president of analytics at Gartner.[9]

The contract chip manufacturing market soared 27.9%. Leaders

The volume of the global contract microchip industry in 2022 showed an increase of 27.9% compared to the previous year, reaching a new record level. Such data are contained in the IDC study, the results of which were released on June 27, 2023.

Analysts say several factors are having a positive impact on the market. These are, in particular, new long-term cooperation agreements that the largest contract manufacturers conclude with customers. In addition, prices for shipped products are growing against the background of the current macroeconomic situation and high inflation. At the same time, new technological processes are being introduced: the products manufactured using them are more expensive than the products of the previous generation. Additional capacities are also being commissioned.

Contract manufacturing plays a key role in the supply chains of semiconductor products. All leading manufacturers in 2022 showed double-digit growth in revenue. However, due to changing market conditions, the revision of orders led to a sharp decrease in the capacity utilization of enterprises, "said Galen Zeng, IDC Senior Manager for Research in Semiconductor Products in the Asia-Pacific Region.

The top ten contract chipmakers include TSMC, Samsung Foundry, UMC, GlobalFoundries, SMIC, HHGrace, PSMC, VIS, Tower and Nexchi. The undisputed global market leader is Taiwan's TSMC, which controls more than half of the industry. This company continues to develop its advanced production processes, thanks to which it has the opportunity to strengthen its position. Thus, according to IDC estimates, TSMC's share rose from 53.1% in 2021 to 55.5% in 2022. It is said that an increase in the number of orders for products manufactured according to 3, 4 and 5 nm standards also contributes to the strengthening of the company's position.

Samsung Foundry is in second place in the ranking of the largest contract microchip manufacturers with a result of 16% in 2022. Closes the top three UMC with a share of 6.8%. This is followed by GlobalFoundries, which controls 5.9% of the global industry. SMIC accounts for 5.3%. HHGrace, PSMC, VIS, Tower and Nexchi jointly hold 7.1% of the global contract production market. The total share of all other players is approximately 3.4%.

The IDC study notes that Chinese manufacturers are actively introducing new technical processes, thereby strengthening their market position. Their total share in 2022 was at the level of 8.2% against 7.4% in 2021. Revenues of such producers rose by more than 30% on an annualized basis.

Data based on capacity utilization suggests that integrated circuit developers were actively stocking up until the first half of 2022. At the same time, the signing of long-term contracts contributed to the preservation of stable prices for services of contract producers and provided capacity utilization up to 90-100%. However, from the second quarter of 2022, a change in the situation began to be observed in supply chains, and the developers of integrated circuits reduced the volume of orders. In particular, some long-term agreements on consumer electronics products were canceled. At the same time, IDC notes, there is a high level of orders for microchips related to devices and systems of artificial intelligence, as well as high-performance computing (HPC). Analysts believe that by the end of 2023, the volume of the global contract production industry will decrease by 6.5% on an annualized basis.^[10]

World's Top 10 Chip Buyers

On February 6, 2023, Gartner announced a ranking of the largest buyers of semiconductor microchips. It is reported that ten leading global original equipment manufacturers (OEMs) in 2022 reduced costs by 7.6% compared to 2021.

Analysts note that recession and high inflation have hit the global IT market hard, which is why sales of personal computers and smartphones have sharply decreased. This led to a decrease in orders for semiconductor chips. Restrictions in China related to the COVID-19 pandemic also had a negative impact on the industry: the operation of component supply channels was disrupted, which provoked shortages in certain segments, including in the fields of automotive, network and industrial electronics. As a result, average chip prices increased, which created an additional financial burden on customers.

According to estimates, in 2022 the volume of the global chip market amounted to $601.69 billion. For comparison: a year earlier, a result of $594.95 billion was recorded. Thus, year-on-year growth was at 1.1%. According to Gartner statistics, the top ten buyers of semiconductor chips accounted for 37.2% of the total industry in monetary terms.

Apple retained its leading position in the ranking with costs of $67.06 billion, which corresponds to 11.1% of the total size of the industry. For this company, purchases in 2022 decreased by 2.6% compared to the previous year. Samsung Electronics is in second place with a result of $46.07 billion and a share of about 7.7%. Over the year, the South Korean company increased spending by 2.2%. The Chinese Lenovo closes the top three with $21.03 billion and 3.5%: over the year, the company's microchip costs decreased by 17.2%.

The top ten also included Dell Technologies BBK Electronics expenses in the amount of $18.3 billion and $18.08 billion, respectively, and shares of about 3% each. In sixth place is - Xiaomi $14.6 billion and 2.4%. The seventh line is occupied, the Huawei costs of which amounted to $12.08 billion, the share - 2%. Then they go, and, HP Sony Hon Hai Precision (Foxconn) whose expenses are fixed in the amount of $11.29 billion, $7.98 billion and $7.53 billion, respectively, shares - 1.9%, 1.3% and 1.3%. The costs of all other companies combined reached $377.68 billion, which is equivalent to 62.8% in the total market volume.

Gartner notes that in the top ten, only Samsung and Sony increased spending on semiconductor chips in 2022. In particular, Samsung's costs have risen thanks to good demand for foldable smartphones equipped with a flexible display. The largest drop (minus 19.4%) was shown by Huawei, which was under pressure from tough US sanctions. HP's costs fell 18.9% amid a sharp drop in PC sales.

Sony saw the fastest growth in chip spending in 2022 (plus 16.5%) thanks to sustained global consumer interest in PlayStation 5 gaming consoles. However, the volume of production could not be increased to full satisfaction of consumer demand due to the continuing serious shortage of chips and disruptions in the operation of logistics networks during the year, the study says.

Memory chips accounted for approximately 25% of semiconductor product sales in 2022. But in this segment, revenue decreased by 10% due to a sharp drop in prices in the second half of 2022 amid the economic crisis. The top ten OEMs accounted for 49.2% of memory spending.^[11]

The global chip market showed slight growth

On January 17, 2023, Gartner released the results of a study of the global semiconductor chip industry. It is reported that in 2022 the market volume reached $601.7 billion. This is 1.1% more than the result for 2021, the total revenue of suppliers was estimated at $595.0 billion.

2022 began with a shortage of many semiconductor products, which led to an increase in delivery time and higher prices. And this turned into a reduction in the production of electronic equipment for many end markets. As a result, OEMs have begun to insure themselves against chip shortages by stockpiling chips, said Andrew Norwood, vice president of analytics at Gartner.

Experts point out that by the second half of 2022, the global economy began to slow down due to high inflation, rising interest rates, higher energy costs and ongoing restrictions due to the COVID-19 pandemic in China. This situation has negatively affected the functioning of global supply chains. In addition, consumers, amid market uncertainties, began to reduce spending on equipment, which provoked a decrease in demand for computers and smartphones. Spending has also begun to trim businesses in anticipation of a global recession. All this affected the overall sales of semiconductor products.

The top three semiconductor chip suppliers are unchanged in 2022. The rating is topped by Samsung Electronics with revenue of $65.6 billion and a 10.9% share. At the same time, sales of the South Korean giant on an annualized basis decreased by 10.4%. In second place is Intel, which received $58.4 billion, which corresponds to 9.7% of the global market. The corporation's revenue compared to 2021 decreased by 19.5%, which is explained by a sharp drop in demand for products for the consumer segment. SK Hynix closes the top three, which in 2022 raised $36.2 billion, taking 6.0% of the global industry. For this company, sales on an annualized basis decreased by 2.6%.

The top ten largest players in the semiconductor chip market also include, Qualcomm,, Micron Technologies,, and Broadcom AMD. Texas Instruments MediaTek Apple It is noted that the total revenue of 25 leading industry participants in 2022 rose by 2.8% and amounted to 77.5% of the total.

The memory segment, which accounted for about 25% of semiconductor sales in 2022, showed the worst dynamics: revenue decreased on an annualized basis by 10%. By mid-2022, this sector was showing signs of a significant drop in demand, as OEMs began to drain the memory reserves that they retained in anticipation of an increase in demand. Conditions have worsened to the point where most memory companies announced capex cuts in 2023, and some have begun to reduce wafer output to restore balance in the market.

At the same time, the revenue of manufacturers, not related to memory chips, in 2022 rose by 5.3%. However, against the background of a changed market situation, the dynamics varied greatly for different categories of consumer electronics and commercial products. The largest growth was in the segment of analog solutions with an increase of 19%. This is followed by discrete devices - plus 15% compared to 2021. The growth of both analog and discrete products is primarily due to high demand from the automotive and industrial sectors. This is due to the long-term prospects for sustainable development in the field of vehicle electrification, industrial automation and innovations in the energy sector.^[12]

6-Month Decline in Semiconductor Sales

A decline in semiconductor sales in July 2022 adds to fears of a global recession, with global chip sales slowing for six straight months.

The pace of humiliation is the longest since the U.S.-China trade war in 2018.

The three-month moving average in chip sales correlates with global economic performance in recent decades.

Chip sales act as an indicator of the global economy and can predict ups and downs in it.

2021

Global Chip Development Market Growth by 48% - TrendForce

The revenue of the world's ten leading integrated circuit development companies in 2021 increased by 48% on an annualized basis, to $127.4 billion. TrendForce researchers reported this in mid-March 2022.

In its study, TrendForce points out three main differences from the 2020 rating. First, Nvidia overtook Broadcom to finish second. Second, Taiwan's Novatek and Realtek climbed to sixth and eighth, respectively. Originally ranked tenth, Dialog was replaced in that position by Himax after Dialog was acquired by IDM Dialog Renesas.

Qualcomm continues to rank first among all developers in the world, primarily due to sales growth of SoC for mobile phones (System on Chip) and IoT chips by 51% and 63% year-on-year, respectively. Adding diversified development to the company's radio frequency and automotive chip business was key to a 51% revenue increase. Nvidia implemented the integration of software and hardware, demonstrating its ambitions in creating a "comprehensive computing platform." With 64% and 59% annual revenue growth from gaming graphics cards and data centers, respectively, Nvidia has successfully risen to second place. Broadcom has benefited from solid sales figures for network chips, broadband chips and storage and bridge chips, with revenue up 18% year-on-year. AMD's computer and graphics revenue rose 45% year-on-year thanks to strong sales of Ryzen processors and Radeon GPUs, as well as an increase in the average selling price. Coupled with growing demand from cloud companies, annual revenue for AMD's corporate, embedded and partially specialty divisions increased 113%, resulting in annual growth in total revenue of up to 68%.

Taiwanese firms' strategy is different in that MediaTek's focus on mobile phone SoCs has performed well. Driven by increased 5G penetration, MediaTek's mobile phone product portfolio sales figures rose 93% and the company committed to increasing its high-end product portfolio share, leading to an annual revenue growth of 61%. Both of Novatek's main product lines - SoC and display drivers - have grown significantly. Thanks to improved product performance, increased shipments and beneficial price increases, revenue rose 79% year-on-year, the highest among the top ten companies. Realtek's success is driven by strong demand for Netcom products and commercial laptops, while the performance of audio and Bluetooth chips remains fairly stable, delivering 43% annual revenue growth. Himax is in the top ten for the first time in 2021. Due to a significant annual increase in revenue from large and medium/small IC drivers by 65% and 87%, respectively, total revenue exceeded $1.5 billion, or 74% on an annualized basis.

More broadly, growing demand for high-performance products such as high-performance computing, high-speed data transfer, servers, automotive and industrial applications will create good business opportunities for integrated circuit companies and drive overall revenue growth. However, terminal system manufacturers continue to face the problem of component mismatch. In addition, rising foundry costs, worsening geopolitical conflicts and rising inflation will hurt global economic growth and could affect the already weakened consumer electronics market. These are challenges that integrated circuit companies will face in 2022, according to Trend Force.^[13]

Global chip sales reach 1.15 trillion units

On February 14, 2022, the Semiconductor Industry Association (SIA) published a study in which it reported that in 2021, chip sales globally reached $555.9 billion, the highest in the history of market surveillance and 26.2% more than in 2020 ($440.4 billion).

The industry delivered a record 1.15 trillion semiconductor devices in 2021 as chip companies ramped up production to meet strong demand amid global chip shortages. Global sales for December 2021 amounted to $50.9 billion, which is 28.3% more than in December 2020, and 1.5% more than in November 2021. Sales in the fourth quarter amounted to $152.6 billion, which is 28.3% more than in the fourth quarter of 2020 and 4.9% more than in the third quarter of 2021.

Monthly sales are compiled by World Semiconductor Trade Statistics (WSTS) and represent a three-month moving average. SIA represents 99% of the U.S. semiconductor industry by revenue and nearly two-thirds of firms that make chips outside the U.S.

In 2021, amid ongoing global chip shortages, semiconductor companies have significantly increased production to unprecedented levels to meet consistently strong demand, leading to record chip sales and shipments, said John Neuffer, president and chief executive of SIA. - Demand for semiconductor production is projected to increase significantly in the coming years as chips are further introduced into critical technologies of the present and future. To ensure the growth of semiconductor manufacturing and innovation in America over the long term, the U.S. government must quickly fund investment under the CHIPS Act in semiconductor research, development and manufacturing under bipartisan competitiveness legislation. This will greatly strengthen the American economy, national security, critical infrastructure, supply chains and technological leadership.

In regional terms, the largest growth (27.4%) in 2021 was observed in the market of the Americas. China remains the largest individual semiconductor market, sales on which in 2021 will amount to $192.5 billion, an increase of 27.1%. Annual sales in 2021 will also increase To Europe in (27.3%), Asia-Pacific/all others (25.9%) and (Japan 19.8%). December 2021 sales increased from November 2021 in the Americas (5.2%), (China 0.8%), (To Europe 0.3%) and Asia-Pacific/all others (0.1%), but declined slightly in Japan (-0.3%).

Several segments of semiconductor products stood out in 2021. Analog devices, a type of semiconductor commonly used in vehicles, consumer products and computers, had the highest growth rate of 33.1% per year, reaching $74 billion in 2021. Logic ($154.8 billion in 2021) and drives ($153.8 billion) were the largest categories of semiconductors in terms of sales. Annual sales of logic products increased by 30.8% compared to 2020, and sales of memory products - by 30.9%. In the microprocessor category, sales in 2021 increased by 15.1% to $80.2 billion. Sales of all non-memory products combined increased by 24.5% in 2021. The implementation of automotive integrated circuits increased by 34.3% compared to 2020 and reached a record high of $26.4 billion.^[14]

Global chip market up 25%, to $583.48

The global chip market in 2021 grew by 25% compared to 2020 and for the first time exceeded $500 billion - the volume reached $583.48. Such data were released on February 1, 2022 by Gartner analysts.

According to their estimates, the world's ten largest buyers of semiconductor products in 2021 increased spending on it by 25.2% and occupied 42.1% of the market. Apple still spends the most money on microcircuits: in 2021, the share of the American corporation in global chip purchases reached 11.7%. It is noted that Apple's memory spending increased by 36.8%, on other types of chips combined - by 20.2%. At the same time, the American technology giant cut back on the purchase of computing processors (MPU) due to the transition to proprietary solutions.

Samsung Electronics, which retained second place in the list of the largest buyers of chips in 2021, increased spending on them by 28.5%. Purchases of memory for devices of the South Korean giant increased by 34.1%, and the rest of the chips - by 23.9%. Samsung's money spending on memory increased largely due to the increase in its cost, as well as the increase in shipments of smartphones, solid state drives (SSDs) and other electronics that the company is betting on, the study said.

According to the results of 2021, the three largest buyers of chips included, Lenovo which increased purchases by a third, to $25.28 billion, Huawei which in 2020 was in the top 3, a year later dropped to seventh place in this rating due to sanctions. USA Shipments of chips of the Chinese company in 2021 sank by 32.3%.

In 2021, semiconductor manufacturers increased chip supplies, but demand from OEMs far outstripped supplier production capacity, said Gartner research director Masatsune Yamaji.

The lack of chips did not allow OEMs to increase the production of not only cars, but also various electronic equipment, including smartphones and game consoles. However, the deficit significantly increased selling prices, which meant that OEMs spent much more on semiconductor purchases in 2021 than in previous years, the researchers point out.

The average cost of sold semiconductor chips, such as microcontroller units, general purpose logic integrated circuits (ICs) and various specific application processors, in 2021 increased by at least 15%.

The shortage of chips has also accelerated dual OEM redundancy and contributed to panic buying, resulting in a spike in their semiconductor costs, Yamaji reported.

Analysts add that the chip shortage and the COVID-19 coronavirus pandemic negatively affected the production of semiconductor products in 2021, but leading electronics manufacturers were able to significantly increase purchases of microcircuits. The growth of the memory market was stimulated by the purchase of servers for cloud data centers, a large-scale transition to a remote format of work and training, as well as a surge in demand for PCs and mobile devices.

According to the industry organization World Semiconductors Trade Statistics (WSTS), the global semiconductor market in 2021 recorded an increase of 25.6%, which is almost four times more than the increase in 2020, when a rise of 6.8% was recorded. In money, the market volume in 2021 grew to $553 billion from $440 billion a year earlier. This jump was the most significant since 2010 - then global semiconductor sales grew by 31.8%.^[15]

Capital spending in the semiconductor industry soared by a third, to $152 billion

Capital expenditures in the semiconductor industry in 2021 increased by a third compared to 2020 and reached $152 billion. This was announced on December 14, 2021 by the research company IC Insights.

According to analysts, in 2021 the foundation sector (IC Foundry - the production of semiconductors according to the technical documentation of customers) again became the first in terms of investments in the development of the industry - it accounted for $53 billion or 35% of the global capital expenditures in the chip market. Data from IC Insights shows that since 2014, contract semiconductor manufacturers have almost invariably led in this indicator. The exceptions were only twice, in 2017 and 2018, when investment in DRAM and flash memory chips soared in the industry.

Experts note that the capital investments of the foundation sector have become a very important and necessary component of the further development of the semiconductor industry in the face of growing demand for microcircuits made using advanced technological processes.

The $53 billion spent by contract manufacturers on capacity expansion fell mainly on market leaders. Thus, TSMC spent 57% of the total, and the Chinese SMIC accounted for only 8%, since due to US sanctions, this company was forced to reduce capital expenditures by a quarter to $4.3 billion. Contract manufacturers as a whole increased their capital expenditures by 42% compared to 2020.

In 2021, memory manufacturers increased capital investments only in the direction of RAM - by 34% to $24 billion, and the solid-state memory segment was limited to a 13% increase in costs to $27.9 billion. In addition to the contract direction, in 2021, manufacturers of microprocessor products (up to $23.5 billion) and various logic devices (up to $12.4 billion), including analog solutions (up to $11.2 billion), demonstrated an increase in costs by more than 40%.^[16]

Samsung Electronics bypasses Intel in semiconductor revenue

In the second quarter of 2021, Samsung Electronics overtook Intel as the largest chip manufacturer in terms of revenue and is expected to retain this title in the near future.

In April-June, a South Korean technology company received 22.74 trillion won, equivalent to $19.7 billion, as income from semiconductor production.

Intel's total revenue was $19.6 billion - or $18.5 billion after^[17] deduction^[18].

Intel has held the top spot in sales for much of the past Samsung three decades, trailing it in 2017 and 2018 as chip sales boomed.

Chip waiting times increased to 18 weeks

Chip-deficient industries will have to wait a little longer as delays to orders continue to mount.

Chip waiting times in May increased by seven days to 18 weeks, according to research by Susquehanna Financial Group. That gap is now more than four weeks above the previous peak in 2018.

Semiconductor shortages are most felt in the auto industry, which is projected to lose more than $100 billion.

Other areas have felt the shortage, too: many electronics manufacturers, including major companies like Apple Inc, are unable to meet all demand for their products.

2020

Growth in the global PC chip market by 17.3%, to $160 billion - IDC

By the end of 2020, the global market for chips for personal computers and servers reached $160 billion, which is 17.3% more than a year earlier, and exceeds the growth rate of the entire semiconductor industry (+ 10.8%). This is evidenced by data from IDC analysts.

They calculated that global sales of chips of all types in 2020 amounted to $464 billion. Thus, the computing solutions segment accounted for about a third of the revenue in the market under consideration.

Demand for PC processors remains strong, especially in those segments where the supply price is paramount, "said Shane Rau, vice president of semiconductor research for computing systems at IDC.

The study also notes that sales of chips for mobile phones in monetary terms in 2020 increased by 9.1%, while deliveries of the devices themselves decreased by more than 10%. Analysts explained this situation by several factors:

• shifting demand for -network-enabled chips, 5G which cost more;
• increasing the average amount of memory in devices;
• the advent of more sensors in electronics;
• support for extended radio frequency bands by gadgets.

According to experts, despite the impact of the COVID-19 coronavirus on the global economy, the global chip market has shown strong performance in 2020. Demand for semiconductors has been uneven throughout the year due to global restrictions, a massive shift to remote work and training, and shifts in consumer buying behavior. IDC considers the demand for chips for consumer devices, computers, 5G equipment and automotive electronics to be one of the catalysts for the growth of the semiconductor industry.^[19]

Semiconductor Materials Market Growth 4.9%, to $55.3 Billion - SEMI

At the end of March 2021, the international association SEMI announced that the global semiconductor materials market grew by 4.9% in 2020 to $55.3 billion, setting a new record.

The previous market high of $52.9 billion was set in 2018. Revenue from the sale of materials for the production of plates and materials for housing, which in 2020 amounted to $34.9 billion dollars and $20.4 billion, respectively, increased by 6.5% and 2.3% compared to the same period in 2019. The growth in wafer production grew due to sales of photoresistors and auxiliary materials, liquid reagents and chemical-mechanical segments, while the growth in packaging materials production was driven by the expansion of the organic substrate and thermocompression welding wire market.

For the eleventh year in a row Taiwan , it became the world's largest market for semiconductor materials with a capital of $12.4 billion due to its foundry capacity and a modern base of packaging products (an increase of 8.2%). Thanks to an aggressive increase in capacity China , it overtook Korea and took second place ($9.7 billion with an increase of 12.0%). China Taiwan and Taiwan saw particularly strong growth, but markets and South Korea Japan other countries also South Korea expanded: it saw an increase of 3.9% to $9.2 billion, in Japan - by 3.1% to $7.9 billion, in all other Southeast countries, Asia including, - by Singapore 5.4 Malaysia% Philippines to $6.7 billion.

At the same time, the markets of North America and Europe experienced a decline due to the COVID-19 pandemic: in North America by 0.6% to $5.5 billion, in Europe by 7.3% to $3.6 billion.

Global semiconductor sales in 2020 have grown moderately, despite the difficult macroeconomic conditions caused by the pandemic and other factors, commented President and CEO SIA John Neuffer.

At the same time, he expressed concern about a decrease in the US contribution to world chip production.^[20]

Top 10 chip buyers - Gartner

The company remained the largest buyer of semiconductor products in 2020. Apple This is evidenced by the data of analysts. Gartner

They calculated that at the end of 2020, the supply of chips for Apple reached $53.62 billion, which is 24% more than a year earlier, and corresponds to 11.9% in the total market volume. The researchers attributed Apple's leadership to the following factors:

• strong sales of AirPods wireless headphones, which remained so in 2020;
• "in particular demand" for Mac computers and iPad tablets;
• increased flash memory usage.

The rise in demand for mobile PCs and tablets, helped by the transition of people to work from home, has largely spurred the production of Macs and iPads in 2020, says Masatsune Yamaji, senior analyst at Gartner. - In addition, the company in the second half of the year began to switch to its own Apple Silicon processors in the Mac product line.

Samsung Electronics retained the second place in the list of companies spending the most money on microcircuits in 2020 with a result of $36.42 billion and a share of 8.1%. Purchases of such products by the South Korean giant for the year rose by 20.4%, in which experts see a direct connection with the weakening of competition from Huawei against the background of US sanctions against the Chinese vendor.

Another reason that forced Samsung to increase purchases of chips was the high demand for enterprise-class solid state drives (SSDs) for data centers. The company was helped by the trend of switching to a remote format of work and training, which stimulated the demand for computers and cloud servers - Samsung drives are often used in them.

The highest dynamics of chip purchases (+ 26%) in 2020 was demonstrated Xiaomi. Masatsune Yamaji noted that Xiaomi's telephone business COVID-19 suffered slightly due to the pandemic in 2020 due to the fact that the company relied on online sales smartphones.

Sanctions against Huawei have allowed Xiaomi to increase its share of the smartphone market. Xiaomi's great success in producing a wide range of consumer IoT devices, including Smart TVs, wearable electronics and smart appliances, also increased its semiconductor costs in 2020, "the expert said.

In total, the 10 largest electronics manufacturers increased their purchase of semiconductors by 10%, as a result of which these companies accounted for 42% of the world's semiconductor costs, compared to 40.9% in 2019.

Analysts call the COVID-19 pandemic and the political conflict between the United States and China the two main factors that influenced the semiconductor expenses of companies in 2020.

The pandemic weakened demand for 5G smartphones and led to car production disruptions, but boosted demand for mobile PCs and video games, and spurred investment in cloud data centers. In addition, the rise in semiconductor costs over the past year was facilitated by the rise in price of memory chips, Masatsune Yamaji said.

Huawei in 2020 sharply reduced spending on chips. After US authorities tightening trade restrictions on Huawei, it almost lost the opportunity to purchase chips from foreign manufacturers. As a result, the supply of Huawei smartphones and the vendor's presence on the world stage have noticeably decreased. At the same time, China it remains an important market for semiconductor manufacturers, as other telephone brands from the PRC are trying to fill the gap that arose due to the weakening of Huawei in the second half of 2020, according to a study by Gartner.^[21]

Growth in chip sales by 5.4% due to memory, to $442 billion - IDC

According to the analytical company IDC, despite the impact of the COVID-19 coronavirus pandemic, the global semiconductor market in 2020 performed better than expected, thanks to an increase in demand for cloud computing and devices to support remote work and training. Global semiconductor revenue rose to $442 billion in 2020, up 5.4% from 2019, according to an IDC report. The DRAM and NAND memory segments also recovered from a disappointing 2019, posting 4% and 32.9% growth, respectively.

According to experts, the volume of the semiconductor industry will grow even faster as the economy recovers. At the same time, the nature of the recovery will depend on how quickly government stimulus plans stabilize global macroeconomics and ensure consumer confidence, said Mario Morales, vice president of the IDC technology and semiconductor development program.

Certain markets are especially important for restoring the economic situation - these are 5G, cloud technology, peripheral computing and the specialized foundry industry. Semiconductor technologies remain a critical component in the development and recovery of all industries, he stressed.

The chip segment for computing systems, including personal computers and servers, outperformed the semiconductor market as a whole in 2020 in terms of growth, increasing by 10.9% year-on-year to $152 billion in 2020. Measures to combat COVID-19 forced company employees and students to stay at home, which forced organizations and consumers to purchase new PCs. In addition, the dispersal of workers and students has forced cloud service providers, telecommunications service providers, and corporate IT departments to develop their computing infrastructure.

Smartphones became the second largest driver of demand for chips in 2020. Healthy competition has led to 5G-enabled phones being sold in a wide range of prices, reaching a wider range of consumers. Cellphone shipments fell more than 5% in 2020, but ultimately sales of cellphone semiconductors rose about 3% thanks to the use of 5G modems, increased memory, sensors and extended range in devices, said Phil Solis, director of communications and semiconductor research for smartphones. At the same time, in the future, 5G phones will account for up to 30% of all smartphone shipments, and chips for 5G phones will account for almost 54% of revenue in this segment.

The pandemic has also significantly affected the automotive and industrial chip markets. Sales improved in the third quarter of 2020, but carmakers cannot maintain normal production due to a shortage of semiconductors. Sales of cars, including light commercial vehicles, in 2020 decreased by 14.5% to 71 million cars, as a result of which revenue from sales of automotive semiconductors decreased by 8.4% to $37 billion. The restoration of the automotive industry in the future depends on the effectiveness of vaccination. However, the increase in the content of semiconductors in vehicles continues to outstrip the growth in car sales due to the growth in the production of semiconductors that provide electrification, infotainment and communication technologies, says Nina Turner, research manager at Automotive Semiconductors^[22]

Global Chip Market Showed Growth Again

The global chip market began to grow again in 2020, which was largely facilitated by the COVID-19 coronavirus pandemic. Sales of semiconductor products globally reached $449.8 billion, up 7.2% from 2019, when there was a 12 percent decline, according to data from Gartner.

The memory segment grew the strongest in 2020 - by $13.5 billion, which corresponds to 44% of the increase in the entire semiconductor industry. Memory sales have grown due to a surge in demand for desktops and laptops caused by the massive transition of people to work and study from home due to the pandemic.

In 2020, revenue from the sale of NAND flash memory in the world reached $52.8 billion, rising by almost 24% on an annualized basis. There were problems with the supply of flash memory in 2020, which led to its tangible rise in price in the first half of the year. At the end of the year, NAND flash solutions fell by an average of 2%.

In the second half of 2020, NAND flash supplies exceeded demand - memory manufacturers were counting on even higher sales, given the earlier demand from owners of hyperscale data centers and manufacturers of personal computers.

At the beginning of 2020, it was expected that COVID-19 would negatively affect all markets for final equipment, but the real effect was not so strong, "says Andrew Norwood, vice president of research at Gartner, whose words are quoted in a press release. - The automotive industry, industry and some segments of the consumer market have been hit hard by spending cuts for companies and consumers. However, the shutdowns significantly increased the volume of remote work and study, and all the markets that contributed to such activities were in the black.

According to the expert, the demand for server solutions in 2020 was strong thanks to the owners of hyperscale data centers (they account for more than 65% of server memory sales), which increased capacity amid a surge in demand for cloud services in a pandemic.

In addition, as reported in the study, the spread of coronavirus led to the fact that people began to work and learn more often from home, and this, in turn, spurred the demand for computers from consumers and companies. The result was growing sales for processors and memory DRAM and NAND flash, analysts explained.

Intel remained the leader in the global chip market due to the fact that in 2020 its sales increased by 3.7% due to a surge in the supply of processors for servers and personal computers. The American vendor accounted for 15.6% of the market against 12.5% of Samsung Electronics, which took second position. SK Hynix also entered the top 3 chipmakers in terms of revenue in 2020, as well as in 2019.

According to Gartner, despite the slowdown in the market as smartphones a whole, high sales of supported devices 5G helped Qualcomm MediaTek to achieve solid growth in 2020 - the semiconductor revenue of these companies rose by 21.5% and 38.3%, respectively. High growth rates were also observed in (+ Kioxia 30.4%) and (+ Nvidia 37.7%).

Texas Instruments, which has seen its chip sales decline 2.2% in 2020, fared worst. Moreover, the American company turned out to be the only vendor from the top 10 with falling revenue on the market.

Demand for 5G solutions will offset weakening demand for system chips, analysts said, as the former are more cost-effective products - the average price of 5G chipsets is higher, plus they require additional installation of chips for power management and RF components.^[23]

For the first time, chip developers without factories accounted for a third of the market

For the first time, the developers of chips without factories (fabless model) accounted for a third (32.9%) of the market. This happened in 2020, according to analysts at IC Insights.

For comparison, in 2019, the share of chipmakers that only develop microcircuits (the largest among them are AMD and Qualcomm), but produce them, was 29.7%, in 2018 - 25.8%. The previous record figure for such companies dates back to 2016, when it was measured at 30.6%.

According to the study, in 2002, fabless vendors accounted for only 13% of revenue in the semiconductor industry. In 2017 and 2018, the share of these companies decreased due to a surge in memory chip sales, where faceless developers are very poorly represented. However, in 2019, when the memory segment performed poorly, the situation changed, and the share of these developers in the chip market rose by 3.9 percentage points, to 29.7%.

In 2020, growth continued, and the total revenues of chip developers without production capacity reached $130 billion, an increase of 22% compared to 2019. AMD made the greatest contribution to this rise, with sales growing by $2.8 billion.

The IC Insights report compares faceless chip makers to companies specializing in the IDM (Integrated Device Manufacturers) model, in which companies offer contract chip manufacturing services but also produce proprietary chips. This model is practiced by Samsung and Intel.

According to experts, the total turnover of IDM manufacturers in 2020 turned out to be $267.8 billion, which is 6% higher than a year ago. The growth dynamics of manufacturers working on the fabless and IDM models tend to be very different. At the same time, there is a close connection between the growth of turnover of faceless semiconductor companies and contract manufacturers (they only produce products by order, but do not develop them), experts emphasized.^[24]

2019

Chip market slumps at 20-year record pace

According to the analytical company Omdia, the volume of the global semiconductor industry in 2019 amounted to $485 billion, down 11.7% or $56.6 billion compared to 2018. There has not been such a severe market downturn for almost two decades. The previous record regression in the 21st century was recorded in 2009, when chip sales decreased by 10.9%.

Revenue in many segments of the semiconductor industry declined in 2019. For example, the implementation of RAM chips sank by 37.2%, flash memory - by 24.5%. Experts also note a drop in revenue from sales of chips for working with artificial intelligence by 7% and a 13.3 percent decrease in revenue in the category of wireless communication technologies.

Despite the decline in the volume of the semiconductor industry, Intel's revenue in it increased by 1.3% and reached $71 billion. Thanks to this, the American corporation returned to first place in the market, ahead of Samsung, which led in 2018.

Intel's results in 2019 were the result of the triumph of the company's diversified business model. Five years ago, she began to change her strategy, refocusing the business on several important products and end markets. In 2019, this brought its results and allowed Intel to avoid dependence on one product or product segment, thanks to which the consequences of a large-scale fall in the market for Intel were weaker, said Omdia analyst Ron Ellwanger.

Samsung's semiconductor revenue in 2019 sank about 30% due to the company's large business dependence on the memory market. For the same reason, SK Hynix and Micron Technology experienced a significant decline.

Sony's revenues in the chip market rose 31% due to the dominance in the image sensor segment, the study said.^[25]

The largest chip developers without their factories - TrendForce

On March 17, 2020, the analytical company TrendForce released the results of a study in which it listed the largest chip developers who do not have their own production facilities. Such companies place orders for the mass production of semiconductors in third-party factories.

Broadcom, Qualcomm and Nvidia earned the most among faceless chipmakers in 2019, but the revenue of these companies decreased by 7%, 11.3% and 9.3%, respectively. At the same time, almost all other companies from the top 10 showed an increase.

Due to the decline in the leading three, the 10 largest chipmakers recorded a combined decrease in market revenues by 4.1% to $68 billion.

Broadcom's revenue fell due to Washington's trade restrictions, experts said. Qualcomm has regressed due to increased competition from companies such as Huawei, MediaTek and Unisoc. Nvidia has seen a glut of graphics cards throughout the first three quarters, which has reduced revenue.

Taiwanese chipmakers MediaTek, Novatek and Realtek, by contrast, improved their results. Revenues of these companies in 2019 increased by 1%, 15% and 29.4%, respectively. 

The study notes that AMD has increased chip sales due to Intel's inability to effectively address the shortage of its processors. Driven by strong sales growth in the second half, AMD finished all of 2019 with 4 percent revenue growth. Intel is not in the ranking, since the corporation has its own production facilities.

The decline in 2019 was also experienced by Marvell, which suffered from the aggravation of the US-China trade conflict. Also, the vendor's performance worsened after the sale of the business for the release of solutions for. Wi-Fi

Market collapse, coronavirus will further worsen sales

Memory chip sales on a global scale at the end of 2019 amounted to $109.02 billion, according to data from the analytical company ResearchAndMarkets.

Experts did not specify the dynamics in comparison with 2018. Most likely, there was a decline: according to estimates by the Semiconductor Industry Association, in 2019 the volume of the global chip market decreased by a third, amounting to just over $106 billion. Gartner recorded a 31.5 percent regression and noted that memory accounted for 26.7% of revenue in the semiconductor industry in 2019.

According to experts, by the end of 2019, memory chip stocks returned to fairly healthy levels, partly due to the fact that some manufacturers were actively engaged in supplies to ease the negative consequences of the introduction of duties on the import of some goods from China into the United States.

However, the situation may worsen due to the outbreak of coronavirus, which undermines the production of semiconductors. According to the DigiTimes portal, citing industry sources, enterprises in China register low employee returns after celebrating the Lunar New Year. In addition, against the background of morbidity, several Chinese cities were isolated. In such a situation, not only local high-tech companies, but also foreign ones with production facilities in the PRC, introduce quarantine measures.

Participants in the supply chain for memory manufacturers say that the existing stocks of materials will only last until mid or late February, and in the future, supply interruptions may begin, since the coronavirus has disrupted production from the relevant suppliers. In their memory chip factories, less than 30% of employees were able to return to work amid the ongoing epidemic, sources said.^[26]

Worst year for the chip market since 2001

The volume of the global chip market in 2019 amounted to $412.1 billion, down 12.1% compared to 2018. That decline was the strongest since 2011, when chip sales collapsed 32% in the so-called dot-com crisis. Such data are provided by the Semiconductor Industry Association (SIA).

The combination of several factors, including global trade conflicts and cyclical fluctuations in prices for semiconductor products, has led to a significant reduction in chip sales in the world, said SIA President and CEO John Neuffer.

According to him, in the second half of 2019, the global chip market recovered somewhat, and in the fourth quarter, chip sales increased compared to the previous three months. To further restore the semiconductor industry, measures are needed to promote free trade and openness of world markets, the expert said.

Most of the semiconductor market in 2019 came from sales of memory and logic chips - the volume of each of these segments amounted to about $106.4 billion. Memory spending fell by 32.6%. Revenue in the DRUM and flash categories decreased by 37.1% and 25.9%, respectively.

The three largest segments of the semiconductor industry in 2019 were closed by microprocessors, sales of which reached $66.4 billion. The study also notes a 9.3 percent increase in optoelectronics sales.

Analysis from a geographical point of view indicates widespread negative dynamics. Semiconductor sales fell the most in North and Latin America - by 23.8%. In Japan and Asia-Pacific, declines were measured at 10% and 9%, while in China and Europe, semiconductor revenue decreased by 8.7% and 7.3%, respectively.^[27]

Apple became the largest buyer of chips - Gartner

In 2019 Apple , it returned to first place in the list of the largest buyers of chips. The American corporation accounted for 8.6% of global semiconductor costs. In second place is located Samsung with an 8 percent indicator, according to analysts. Gartner

Apple climbed to the top spot in the ranking thanks to strong demand for wearable electronics, including the Apple Watch smartwatch and AirPods wireless headphones, they said.

The US company's semiconductor costs also rose after the start of using a triple camera in new iPhones. Falling memory prices have helped Apple make new smartphones more cost-effective products without significantly raising prices, said Gartner senior analyst Masatsune Yamaji.

Samsung's semiconductor budget in 2019 decreased by 21.4%, largely due to the sharp reduction in the cost of memory chips. In addition, the problems of the South Korean giant in the markets of smartphones and solid-state drives affect. According to analysts, before that, Samsung led in chip spending for three years in a row.

The three largest buyers of chips at the end of 2019 were closed by Huawei, despite the US-China trade conflict. The semiconductor costs of the Chinese company decreased by only 1.8%, which was facilitated by its success in the smartphone market, experts say.

Total sales of semiconductor products in 2019 reached $474.63 billion, which is 11.9% less than a year earlier. This decline is due to falling memory prices.

The composition of the top five largest buyers of semiconductors has not changed in 2019, but costs have decreased for all companies, says Masatsune Yamaji. - The main reason was a sharp drop in memory prices. In 2018, memory was very expensive, which was a heavy burden for many OEMs: its costs accounted for 45% of the total amount spent on chips. However, the situation has improved in 2019. The share of memory costs for the five leading electronics OEMs has been reduced to 36%, but the computing capabilities of the devices have increased due to higher performance processors and more memory.

Rising global uncertainty and slowing macroeconomics also had a negative impact on the semiconductor industry. Political differences, including the U.S.-China trade war, Britain's secession from the EU, the conflict between Japan and South Korea, and the Hong Kong protests have slowed global growth, the study said.

This macroeconomic environment has led to a cooling of demand for a wide range of electronic equipment. Electronics sales in 2019 decreased by $4.7 billion or 0.2% compared to 2018, Yamaji said.

The share of the world's 10 largest buyers of semiconductor solutions in 2019 decreased to 39.5% from 39.9% in 2018. The top 10 includes almost all the same companies as in 2018, with one exception - Foxconn supplanted [[Kingston Technology] and ranked 10th in the Gartner rating.

In 2019, chip costs fell for all 10 of the largest buyers of these products, except Xiaomi. The Chinese manufacturer of smartphones and other consumer electronics increased costs by 1.4%, which allowed it to rise from 10th place in 2018 to 8th in 2019 in the overall standings.

Gartner expects that after the collapse in 2019, global semiconductor revenue in 2020 will return to growth, but did not give a more specific forecast.^[28]

The leader has changed in the chip market

Intel returned to first place in chip sales due to the fall of the memory segment, which is the main thing for the previous leader -. Samsung Electronics This was announced by analysts in mid-January 2020. Gartner

According to their estimates, the volume of the semiconductor industry in 2019 reached $418.3 billion, a decrease of 11.9% compared to 2018. Memory chip sales fell 31.5% to 26.7% in the total market.

The demand for RAM decreased the most - by 37.5% in terms of revenue. An oversupply of supplies affected here, which began at the end of 2018 and continued in 2019.

The overproduction problem is caused by a drop in memory demand from hyperscale data center operators. This created too much stock in the OEM channel, it took the first half of the year to adjust them. Excessive stocks from DRAM memory manufacturers in the second half of 2019 led to lower prices, as a result of which the average cost of sales of such products in 2019 fell by 47.4%, said Andrew Norwood, vice president of research at Gartner.

Global sales of flash memory in 2019 decreased by 23.1% largely due to high product stocks from the manufacturer and partners at the end of 2018 and sluggish sales in the first half of 2019.

The NAND flash market began to stabilize in July 2019, helped by power outages in factories jointly owned by Kioxia and Western Digital. This problem served as a catalyst for chip stocks to be cleared by manufacturers and contributed to rising prices, which were then at very low levels.

Gartner expects the flash memory market recovery to continue in 2020 due to relatively small growth in shipments amid demand for solid state drives and 5Gsmartphones-.

Intel again became the world's largest chip manufacturer, taking 15.7% of the market at the end of 2019. Semiconductor revenues of the American corporation decreased by 0.7% due to weakening demand for server solutions, a continuing shortage of processors and the sale of their business to produce modems for. smartphones

Samsung Electronics, which lost about 30% of its revenue in 2019, finished second with a 12.5 percent share of the chip market. Like other memory manufacturers, Samsung has suffered from falling DRAM and NAND flash prices. The South Korean giant's revenue from memory chip sales, which accounted for 82% of Samsung's total semiconductor sales, decreased 34% in 2019.

An even more pronounced regression was registered with SK Hynix and Micron, which, together with Samsung, are among the three largest DRAM suppliers. Their annual revenue in the chip market collapsed by 38% and 32.6%, respectively.

The study said global analog chip sales declined 5.4% in 2019, while the optoelectronics segment added 2.4%. Demand for analog solutions fell due to weakness in the equipment markets where these chips are used. First of all, this applies to industrial and automotive equipment, as well as more widespread devices, such as microcontrollers and various logic. Optoelectronics has recorded the best performance of any segment thanks to the growing number of cameras in smartphones.

In 2020, we expect revenue in the semiconductor market to increase after clearing large inventories, driving up average prices, particularly in the memory sector, Andrew Norwood reported.[29]

Accenture: Trends in Semiconductor Manufacturers

On December 25, 2019, Accenture summed up a survey of companies operating in the semiconductor industry and highlighted 5 technology trends that will determine the near future of the industry.

DARQ technologies (blockchain, artificial intelligence, XR-enhanced reality and quantum computing) will dramatically change the semiconductor manufacturer market in the next 3 years. This is the opinion of 60% of industry executives. "87% of manufacturers are already experimenting with one or more DARQ technologies," the report said.

The popularity of technologies among industry representatives was distributed as follows: artificial intelligence (77% of respondents see the future for it), XR (73%), blockchain (55%). A competitive advantage in using DARQ technologies will be the creation of ecosystems and partnership with startups that help "drive" innovation, the authors of the study are sure.

Ecosystem activities are essential to the development of the industry, but at the same time, they increase business risks. Only 23% of semiconductor companies reported knowing about the responsible relationship to ensure the information security of partners in the ecosystem.

To compete successfully, companies need to know their customers better, anticipate their needs even before they arise, the results of the study show.

The survey showed that 94% of industry representatives agree that the volume of consumer data (digital demography) will open up new opportunities for semiconductor industry enterprises.

81% of respondents believe that the presence of digital demographics will expand the opportunities for the sale and delivery of semiconductors. 71% expect the volume of user data to increase significantly in the next 2 years.

According to the authors of the study, instant adjustment to the needs of the customer will become a criterion for the success of the industry in the future. 90% of survey participants agree with this. However, 54% of semiconductor company executives responded that they had roughly equal priority between individual and overall approaches in providing products and services.

"The industry makes an innovative product, but most of its players do not offer advanced solutions for employees," the report said. Thus, 71% of the surveyed managers admitted that the level of digital maturity of their employees is higher than the enterprises they represent. At the same time, the industry is experiencing a significant shortage of personnel, reaching 10 thousand jobs in the world.

According to Rinat Maksutov, head of Accenture's New Technologies practice in Russia, domestic players in the semiconductor industry expect a digital transformation in the development of new products and, as a result, entry into new markets.

"Among the key barriers to the company's transformation are noted: lack of targeted funding, lack of necessary personnel and digital platforms, as well as the need to introduce new models of interaction with customers, and increase the efficiency of organizations. Among the possible risks is a drop in demand and increased competition. Many representatives of the Russian industry are already using solutions such as 3D printing, IoT, Big Data and so far are the least active in using XR and blockchain, " noted Rinat Maksutov, head of Accenture's New Technologies practice in Russia

He notes that manufacturers have a chance to jump on the transformation train and modify their solutions.

Intel returns to first place in chip sales

In 2019, Intel will return to first place in chip sales on a global scale, recording semiconductor revenue of $69.83 billion, which is approximately the same as a year ago. This is evidenced by the data of analysts at IC Insights, released on November 18, 2019.

Samsung, which in 2018 led the chip market, in 2019 will reduce their sales by 29%, to $55.61 billion. As a result, the South Korean company will slide to second place in the ranking of the largest chipmakers. The top three will be closed by TSMC with revenues of $34.5 billion.

Samsung's decline is due to falling memory demand, with sales of such chips expected to decline 34% in 2019. It was thanks to DRAM and NAND flash chips that the company ranked first in the semiconductor industry in 2017 and 2018, experts say.

The top 15 companies with the largest turnover in the semiconductor market in 2019 will include six companies from the United States, three from Europe, two each from South Korea, Japan, and Taiwan. For all these 15 manufacturers, total chip sales will decrease by 15%, and the entire market will show a 13% decline.

The study said it would make Sony the biggest push in the ranking, which is set to climb four spots to 11th in 2019 thanks to strong sales of image sensors. By NXP contrast, it would lose two spots and sit at 14th with 6% lower sales.

Judging by the published data, the rating of leading chipmakers in 2019 will include one contract semiconductor manufacturer (TSMC) and four fabless companies that do not have their own capacities. If TSMC was excluded from the calculations, then the Chinese chip developer HiSilicon, controlled by Huawei, would be in 15th place.^[30]

2018

Deep learning chip sales reach 164.9m - Tractica

The global market for chips designed to solve deep learning problems reached 164.9 million units in 2018. Such data were released on May 6, 2019 by the analytical company Tractica. Read more here.

10 Largest Faceless Chip Developers - TrendForce

At the end of February 2019, the analytical company TrendForce published a study in which it named the largest chip developers who do not have their own production capacity.

Broadcom remained the leader among the so-called faceless chipmakers with revenue of $18.9 billion from chip sales. At the same time, the best dynamics in the top 10 was demonstrated by Nvidia and AMD, in which annual revenues increased by 28.4% and 23.3%, respectively. The researchers linked AMD's rise to sales of 7nm solutions.

The worst situation is with Qualcomm which semiconductor turnover fell by 3.9% due to weakening demand for mobile processors.

Although Qualcomm's strategy in 2018 was very forward-looking, the company's supply of phone chips decreased largely due to the loss of orders for LTE modems from Apple and the fact that Huawei began to use its own processors more.

The study said MediaTek continued to adjust its product portfolio and cost structure, allowing the company to substantially reduce the rate of decline in semiconductor revenue. In 2018, they decreased by 0.7%.

According to TrendForce estimates, the total revenue of Chinese factory-free chip developers amounted to about $37.4 billion, an increase of 23% compared to 2017. The largest chipmakers in this group were HiSilicon, Unisoc (Spreadtrum & RDA) and Beijing OmniVision Technologies, the annual revenue of each of which exceeded $1 billion.

Experts note that although China is trying to reduce dependence on semiconductor imports, in the segment of high-class chips, the Celestial Empire still relies on foreign suppliers. Analysts recommend that Chinese chipmakers step up R&D to improve the situation.^[31]

The 10 biggest chip buyers. Huawei entered the top 3 for the first time

On February 4, 2019, research company Gartner presented a rating of the largest chip buyers. Apple and Samsung remained the frontrunners, while Huawei made the top 3 for the first time.

The Chinese company increased semiconductor purchases by more than 45% in 2018, putting it ahead of Dell and Lenovo.

In addition to Huawei, other manufacturers from the Middle Kingdom are actively increasing spending on chips. The top ten chip consumers in 2018 included four Chinese companies (Huawei, Lenovo, BBK Electronics and Xiaomi), while in 2017 there were three. At the same time, Xiaomi moved immediately eight lines up - from 18th to 10th place

According to experts' calculations, the ten companies that spend the most on chips spent a total of 40.2% on them in 2018 in the total volume of semiconductor purchases in the world. Compared to 2017, this share increased by 0.8 percentage points.

Apple and Samsung accounted for 17.9% of total semiconductor spending in 2018, down 1.6 percentage points from the previous year. The cost growth rate of these companies has significantly decreased, said Gartner analyst Masatsune Yamaji.

LG Electronics and Sony left the ranking of the 10 largest chip buyers in 2018, while Kingston Technology and Xiaomi, by contrast, were included in this list.

According to the results of 2018, Gartner analysts estimate the total expenses of companies for the purchase of semiconductor products at $476.69 billion, which is 13.4% more than a year ago. Experts attribute this increase to higher prices for RAM, an increase in its volume in devices and the focus of buyers on the most expensive solutions.^[32]

It is expected that the share of DRAM memory in the total amount of spending on chips in 2019 and 2020 will increase to 33% and 34%, respectively, against 31% in 2017.

Market growth of 10% to 1.07 trillion - IC Insights

In 2018, the size of the semiconductor market reached a record, for the first time exceeding 1 trillion. Deliveries of all types of chips, including integrated circuits (IC), optoelectronic circuits, sensors and discrete solutions (O-S-D), amounted to 1.07 trillion units, an increase of 10% compared to 2017. This is stated in a study by IC Insights, excerpts from which were released on January 24, 2019.

Since 1978, when 32.6 billion chips were shipped globally, the semiconductor industry has grown by about 9.1% annually. Analysts called this indicator impressive, given the cyclical and unstable semiconductor industry.

The largest segments of the semiconductor industry in IC Insights are optoelectronic circuits, sensors and discrete chips. By the beginning of 2019, O-S-D accounts for 70% of the total volume of semiconductor shipments, and the remaining 30% - integrated circuits. For comparison, in 1980, the shares of these products were measured 78% to 22%.^[33]

In terms of the highest supply growth rates, semiconductor solutions for smartphones, automotive electronics and computing systems that enable artificial intelligence, deep learning applications and big data analysis are leading.

The volume of the chip market in money in IC Insights was estimated at $514 billion at the end of 2018. The top 10 chipmakers controlled 60% of revenue in the industry, while in 2008 they accounted for only 45% of the total.

The contribution of the top five in the same period increased by 14 percentage points and amounted to 47% against 33% 10 years ago. Experts also compared data on a wider list of chip makers, including 25 and 50 largest semiconductor companies. If in 2008 they accounted for 68% and 82% of all revenue in the industry, the volume of which amounted to $365.2 billion, then in 2018 the indicators increased to 79% and 89%, respectively.

Top 5 Suppliers - Gartner

In January 2019, the analytical company Gartner released the results of a study of the global semiconductor market. In 2018, chip sales amounted to $476.7 billion, an increase of 13.4 % compared to 2017.

The largest segment of the market in question remains memory - it accounted for 34.8% of revenue in 2018, compared to 31% a year earlier.

The top 25 semiconductor manufacturers increased revenue in the market by 16.3% and took 79.3% of sales, while the remaining companies increased revenues by 3.6%.

There have been few changes in the top 10. Broadcom climbed from sixth to fifth in the ranking in 2018, while Qualcomm, conversely, dropped from fifth to sixth. Western Digital ranked eighth instead of ninth in 2017, and ST Microelectronics improved its position by two points, sitting in ninth place. You can learn more about the balance of power in the leading ten from the table below.

Gartner analyst Andrew Norwood says that in 2018, the memory chip segment continued to grow, which began a year earlier, but in general, the rise here slowed by half, which is explained by the transition to negative dynamics by the end of the year.

Memory sales have risen largely due to an increase in the average selling cost of DRAM solutions. In the category of flash memory, there was a noticeable decline caused by the cheapening of such products throughout the year due to an oversupply of supplies. However, the volume of the NAND flash segment still grew by 6.5% in 2018, which was facilitated by the growing distribution of solid state drives and an increase in content in smartphones.

The second largest semiconductor category is application-specific standard products (ASSP). Demand for them is growing due to the growth in sales of gaming video cards and markets for automotive applications and wired communications.^[34]

The European Union will spend billions to defeat Samsung and Intel

France,, and Germany Italy Britain will receive from European Union 1.75 billion euros for the implementation of a joint project in the field of microelectronics. The countries have just received official approval of future investments from the EU authorities Reuters^[35] reports in December^[36]

The project will be associated with connected devices. Reuters cites as an example chips and sensors that are used in phones, computers, washing machines, cars and other electronic devices. The project will focus on energy efficient chips, power semiconductors, smart sensors, advanced optical equipment and composite materials.

The project will involve 29 companies and research organizations, including German, Robert Bosch, and Swiss Osram, Carl Zeiss and Infineon STMicroelectronics the AmericanGlobalFoundries Japanese Murata.

Note that until 2005, the share of European manufacturers in global semiconductor sales fluctuated at the level of 9-10%. However, this was followed by a gradual decline, and in 2017 it amounted to only 6%. Sales leaders are mainly American and South Korean companies such as Samsung, Intel and others. There are no European companies in the top ten leaders of the semiconductor market.

2017

How Japan lost the chip market

Over the past 27 years, the global semiconductor market has undergone significant changes in terms of the contribution of various regions to the total turnover. If in 1990 the most influential participants in the industry were chipmakers from Japan, then in 2017 the dominant role was transferred to companies from North America and the Asia-Pacific region. This was reported in the IC Insights study of April 11, 2018.

According to experts, sales in the semiconductor market in 2017 amounted to $444.7 billion. Almost half of this amount, 49%, was provided by North American chipmakers. An analysis of the dynamics in the region over the past 27 years showed that the smallest contribution to the revenue of companies from North America was made in 1990, when their share was 38%, but since 1995 the figure has been around 50%.

At the same time, Japanese chipmakers have experienced a real collapse. Their share in revenue decreased from 49% in 1990 to only 7% in 2017. During this period, representatives of the Land of the Rising Sun such as NEC, Hitachi, Mitsubishi, and Matsushita dropped out of the ranking of leading chip suppliers, compiled annually by IC Insights. Given the upcoming sale of Toshiba Memory to a consortium led by the American investment fund Bain Capital, analysts predict a further reduction in the presence of chipmakers from Japan.

Experts call their South Korean competitors the main culprits of the decline of Japanese manufacturers, which in the study are represented in a subgroup of vendors from the Asia-Pacific region. From 1990 to 2017, the share of the latter in global semiconductor revenue increased from 4% to 38%.

European companies' contribution to global chip sales for much of the period under review hovered around 9%, but fell to 6% in 2017.

Analysts also noted a trend towards an increase in the market share of leading chipmakers. If in 2007 the 5 largest semiconductor companies controlled 33% of revenue, then 10 years later the figure reached 43%. A similar trend among vendors from the top 10, top 25 and top 50.^[37]

Record growth rate over 14 years

In 2017, two significant events took place on the global semiconductor market at once. The total revenue of chipmakers increased by 21.7%, which was the most significant increase in the last 14 years. In addition, the industry leader has changed: instead of Intel, which has permanently headed the list of the largest chipmakers for a quarter of a century, South Korean Samsung has risen to the first line. This was reported in a report by IHS Markit, published on March 28, 2018.

According to analysts, the global sales of semiconductor products in 2017 amounted to $429.1 billion, while in 2016 the figure was at the level of $352.6 billion. Among the product categories, the memory chip segment became the record holder in terms of growth rates, where experts registered an increase of 60.8%. In particular, sales of DRAM products last year increased by 76.7%, and for NAND Flash chips the increase was 46.6%. Analysts stressed that this is the most significant progress in the last 10 years, adding that revenue growth came amid rising prices and increased demand amid limited supplies.

Experts also noted that excluding the memory segment, the semiconductor market in 2017 grew by 9.9%. Positive dynamics was observed in all types of products and in all regions of the world.

SK Hynix and Micron distinguished themselves among vendors, whose semiconductor revenue increased by 81.2% and 79.7% compared to the previous year. In the top 10 list, companies took third and fourth places with results of $26.6 and $22.8 billion, which corresponds to shares of 6.2% and 5.3%.

At the head of the rating is Samsung, whose chip sales increased by 53.6%, to $62.03 billion, which became an absolute record for the South Korean company and allowed it to break into the industry leaders. Intel finished second with $61.4 billion in revenue. In percentage terms, Samsung and Intel's contribution to global semiconductor sales was estimated at 14.5% and 14.3%.^[38]

Chinese chip developers grow fastest

China is strengthening its position in the development of integrated circuits (IC) faster than other countries. This is stated in a study published by the analytical company IC Insights on March 22, 2018.

According to experts, Chinese fabless companies in 2017 controlled about a tenth of the global revenue of faceless chipmakers that develop microcircuits but do not have their own production facilities. Over the past 7 years, the contribution of companies from the PRC to the total sales of the fabless industry has more than doubled: from 5% in 2010 to 11% in 2017, which is the largest increase among faceless chipmakers from all countries.

The impressive progress of the PRC is also evidenced by the fact that the ranking of the 50 largest fabless companies in 2017 included 10 Chinese chipmakers instead of one in 2009. The leader of the Chinese fabless sector Tsinghua Unigroup last year received revenue of $2.1 billion, which allowed the company to become the ninth largest faceless chip maker in the world.

However, while China lags behind the leaders of the industry - the United States and Taiwan. American chip developers, which do not have their own semiconductor plants, in 2017 controlled 53% of the global sales of fabless companies, and Taiwanese accounted for 16% of revenue.

Experts note that in 2010, the presence of chipmakers from the United States reached 69%. The decline was due to the merger of Avago Technologies and Broadcom Corporation, which formed Broadcom Limited with headquarters in California and Singapore. The company plans to move all head offices to the United States, in which case America's share of the revenue of fabless companies will again increase to 69%. As for Taiwanese chipmakers, their market share has not changed since 2010.

Also, an analysis by IC Insights showed that European companies in 2017 controlled 2% of revenue in the market in question, and chip developers from Japan and Korea controlled less than 1%.^[39]

The largest consumers of chips - Gartner

On January 25, 2018, the analytical company Gartner named the largest buyers of chips for the previous year. Samsung Electronics, which outperformed Apple in 2016 in semiconductor purchases, strengthened its lead a year later.

According to the results of 2017, Samsung's microcircuit costs at Gartner were estimated at $43.1 billion, which is 37.2% more than a year earlier. Apple's purchases increased by 27.5% to $38.8 billion. The semiconductor costs of the two companies in total jumped by more than $20 billion, which allowed them to break away in the ranking of the largest consumers of chips. Apple and Samsung have been leading since 2011, having a significant impact on technology and price trends in the market, said Gartner senior analyst Masatsune Yamaji.

The study says that a significant rise in memory prices had a big impact on the balance of power in the 2017 ranking. Many manufacturers, even large ones, could not avoid the shortage of DRAM and NAND flash chips. Moreover, there was a shortage in other segments of the semiconductor industry, such as microcontrollers and discrete and passive components.

In 2017, LG Electronics returned to the top ten companies spending the most on chips. Western Digital made the top 10 for the first time thanks to a 40 percent increase in spending. Semiconductor purchases from Chinese BBK Electronics increased the most - by almost 90%, which allowed it to rise one place in the ranking - from seventh to sixth. There were no changes in the top five relative to 2016.

The top ten chip consumers accounted for 40% of chip spending in 2017, compared to 31% in 2007. Analysts predict that by 2021 this figure will rise to 45%. In this regard, Gartner recommends that chip manufacturers pay great attention to supporting large customers and organizing direct sales.

Intel lost first place in the market for the first time

In 2017, the volume of the global semiconductor industry grew by more than 22%, which was largely facilitated by the memory segment. For the first time in 25 years, the leader has changed in the market, according to the analytical company Gartner.

According to experts, in 2017, chip sales on a global scale reached $419.7 billion against $343.5 billion a year earlier. Memory chip sales, which accounted for about 31% of the market, jumped 64%. The main factor in the surge in the memory segment was the rise in prices caused by a shortage of products. For the first time in history, NAND flash solutions have risen in price in comparison with full years - by 17%. The cost of RAM increased by 44%.

Manufacturers could not take on this price increase, so it switched to consumer products: in 2017, all electronics, including personal computers and smartphones, rose in price.

The world's largest manufacturer of semiconductor products in 2017 became the first. Samsung Electronics The South Korean corporation was able to get ahead of the American one, which Intel had held the lead since 1992. Annual semiconductor Samsung revenue increased by more than half, while at Intel it increased by 6.7%. Intel has increased sales of hardware processors data centers by 6% thanks to large orders from cloud telecommunication and service providers.

Intel's sales of PC processors rose only 1.9%, but the average cost of computers began to rise again after several years of decline caused by the market transition from traditional desktops to multifunctional portable devices, the researchers note.

It is also worth noting the growth of semiconductor revenues of SK Hynix, Micron Technology and Western Digital in 2017 - by 79%, 78.1% and 120.2%, respectively.

Gartner vice president of research Andrew Norwood says that the balance of power among chipmakers, which took place in 2017, may not remain so for long, and "Samsung's leadership has a fragile foundation created from memory."^[40]

Possible change in market leader - for the first time in a quarter of a century

Analysts at IC Insights predict the first change of leader in the semiconductor industry since 1993. In a study published on November 20, experts report that in 2017, the global chip market will be led by South Korean giant Samsung instead of Intel.

In the first quarter of 2016, Intel outperformed Samsung in terms of semiconductor revenue by 40%, but less than a year later, in the second quarter of 2017, Samsung became number one for the first time in terms of chip sales.

The strengthening of the position of the South Korean vendor was facilitated by unprecedented growth in the segment of DRAM and NAND Flash memory chips. Thanks to these products, Samsung's semiconductor revenue in 2017 is expected to reach $65.6 billion, while Intel's annual result will be $4.6 billion less, within $61 billion.

Analysts have followed the dynamics of both vendors since 1993. A quarter of a century ago, Intel led the global chip market with a 9.2% share and $7.6 billion in revenue. By 2006, the processor giant had strengthened in first place: its share increased to 11.8%, and sales reached $31.6 billion. According to IC Insights, in 2017, Intel's market share will decrease and amount to 13.9% against 15.6% in 2016, when the corporation's revenue was measured at $57 billion.

Samsung, by contrast, will increase its market share from 12.1% in 2016 to 15% in 2017. For comparison, in 1993, the company's contribution to global semiconductor sales amounted to 3.8% or $3.1 billion, and in 2006 - 7.3% or $19.7 billion.

The analysis also shows that in 2017, 58.5% of the market will be under the control of the 10 largest chipmakers in terms of revenue. If the forecast is confirmed, this will be the best result of dozens of leading chipmakers since 1993.

Six companies from the top 10 in 2017 will earn at least $17 billion on the sale of chips, and only chip makers with annual revenue of at least $9.2 billion will be able to get into the top ten.^[41]

2016

Recovery Course - IHS Data

On March 30, the analytical company IHS Markit published a press release in which it announced the results of 2016 in the global semiconductor market. It is noted that after the recession that was observed in the industry a year earlier, the chip industry headed for recovery. Global semiconductor revenue amounted to $352.4 billion, which is 2% more than in 2015, when the figure was at the level of $345.6 billion.

Market growth was provided by DRAM and NAND flash memory chips: in this direction, analysts registered a rise of more than 30% in the second half of 2016. The stimulating factors were limited supplies and high demand, combined with higher prices. In 2017, the listed trends are expected to continue and again contribute to record revenue in the memory chip segment.

Another fast-growing focus of the semiconductor market was chips designed for use in automobiles. Sales of such chips increased by 9.7% on an annualized basis, experts calculated, adding that every year the automotive industry uses more semiconductor products such as microprocessors and integrated circuits.

Among vendors, Intel remains the leader in revenue in the semiconductor industry. In 2016, the processor giant increased sales by 6.9%, earning almost $55 billion on chips. Samsung Electronics, Qualcomm, Broadcom Limited and SK Hynix also entered the top 5.

In addition, the study reports that Qualcomm ranked first in terms of sales among the so-called fabless companies - "faceless" chipmakers that do not have their own production facilities. The top 3 in this category also includes Taiwanese mobile SoC developer MediaTek and leading GPU maker Nvidia.^[42]

Samsung again ahead of Apple in the list of the largest consumers of chips

In early February 2017, the analytical company Gartner released the results of a study on the largest consumers of semiconductor products in the world. Samsung Electronics was the leader again after Apple's first downturn.

According to experts, in 2016 Samsung purchased chips worth $31.6 billion, which is 4.4% more than a year earlier. Apple, which led in semiconductor spending in 2015, took second place a year later. These costs for the American corporation decreased for the first time since 2007 (by 3% to $30 billion), from which Gartner keeps records of statistics. Researchers attribute the decline in purchases of Apple chips to a decrease in tablet sales and a decrease in the share of the global personal computer market.

For the sixth year in a row, Samsung Electronics and Apple have topped the semiconductor consumption rating, says Gartner senior analyst Masatsune Yamaji. - While both companies continue to have a strong impact on technology and price trends in the semiconductor industry, their impact has weakened as the outlook for future growth declines.

In 2016, Samsung and Apple accounted for $61.7 billion in chip purchases, which is $0.4 billion more than in 2015. Samsung returned to first place in the ranking despite strong competition from Chinese manufacturers of smartphones, TVs and LCD panels, analysts say.

The lineup of the top ten chip consumers changed to one company in 2016: Cisco dropped out of the top 10, skipping ahead China's BBK Electronics, which increased semiconductor costs by 131.4%.

For the first time, three Chinese companies were among the ten largest semiconductor consumers, despite the slowdown in the economic growth of the Celestial Empire. Also in the rating were four companies from the United States, two from South Korea and one from Japan.^[43]

Growth by 1.5% to $339.7 billion. Intel and Samsung lead the way

Global chip sales rose 1.5% in 2016. At the same time, the market has become more consolidated, according to a study published by Gartner on January 18, 2017.

According to experts, in 2016 the volume of the global semiconductor market reached $339.7 billion against $334.8 billion a year earlier.

According to Gartner, the 25 largest chipmakers recorded 75.9% of the global chip market in 2016, which is 7.9 percentage points more than in 2015. There was one change in the top three: Qualcomm ahead of SK Hynix and climbed to third position. Intel and Samsung Electronics remained the leaders.

After a poor start to the year, which is characterized by inventory sales, there was a surge in the second half of the year caused by an increase in product volume, improved demand and the price situation, says senior analyst at Gartner Adriana Blanco. - Overall, semiconductor revenue was higher in the second half of the year than in the first, reflecting a stronger memory market and continued inventory increases, as well as increased purchases of the Apple iPhone 7 and the impact of the New Year's season.

For the NAND flash and DRAM memory segments, the beginning of 2016 was accompanied by overproduction and falling prices. By the middle of the year, there was already a shortage of products, and prices rose significantly.

The semiconductor industry is traditionally influenced by the economic situation in the world. In 2016, the euro was quite stable against the dollar, while the yen strengthened significantly. Britain's decision to leave the European Union did not have a strong impact on the global chip market, although the sterling rate sank significantly, which led to an increase in the price and a drop in demand for IT equipment in the country, the study said.^[44]

2015: Sales cut 1.9% to $333.7 billion

In 2015, global semiconductor sales reached $333.7 billion, which is 1.9% lower than in 2014, when its volume in monetary terms was recorded at $340.3 billion, Gartner reports. The actual result turned out to be better than the forecast made by the company in January 2015. Then the reduction was expected by the 5.4 percent^[45].

According to analysts, the negative dynamics is due to a decrease in demand for major electronic parts, an increase in the dollar exchange rate and increased warehouse balances.

However, the decline in sales did not affect all categories - optoelectronic components, neoptic sensors, analog components and specialized integrated circuits (ASIC) showed positive dynamics.

The largest growth was demonstrated by the ASIC segment thanks to demand from Apple. Sales of ASIC products increased by 2.4% in 2015. In turn, sales of analog components and neoptic sensors rose 1.9% and 1.6%, respectively.

The first and second places in terms of revenue from the sale of semiconductors were retained by Intel and Samsung Electronics, respectively. SK Hynix climbed from fifth place to third. Qualcomm went down from third to fourth. The fifth place was taken by Micron Technology, which in 2014 was in fourth position. Thus, the first five survived in composition, although some permutations occurred.

2014: Sales up 8% to $340 billion

According to Gartner, sales of semiconductor products used in all categories of electronic devices increased by 8% in 2014, revenue amounted to $340 billion. Intel remains the leader, which, after two years of declining revenues, has returned to the path of growth. Intel has been leading for 23 years in a row, its market share is 15%. Gartner attributes Intel's success to the recovery of the PC industry, in which chip sales grew 8% to $52 billion.

In second place in terms of income is the company Samsung with $34 billion and a market share of 10%. At the same time, in terms of growth rates in the period 2013-2014, the South Korean company was almost twice ahead of Intel - 13%.

In third place comes Qualcomm with an income of $19 billion, the growth compared to 2013 is 12%, but the company's market share is noticeably inferior to the leaders - 6%. The aggregate income indicator of the first 25 manufacturers with a market share of 72% (against 70% in 2013) increased by 12%.

If you look at market segments, memory manufacturers performed best for the second year in a row, showing an increase of 17%. Their income amounted to $46 billion, exceeding the previous 1995 record of $41.8 billion.

2012

IDC: Market shrinks 2.2%

In May 2013, IDC^[46] released data according to which the global semiconductor market in 2012 decreased by 2.2% to $295 billion. The weakness of the industry is due to a dramatic decline in sales in the directly related personal computer market, which has been observed for several quarters and especially intensified in the second half of 2012.

The release of Windows 8 spurred purchasing activity, but not as much as vendors hoped. In addition, Asian brands continued their policy of lowering product prices and producing competitive and budget device models, which did not contribute to market growth. However, IDC believes that in 2013 the semiconductor market will be able to show 3.5% more revenue than a year earlier.

The IDC study involved more than 120 semiconductor manufacturers, and most noted a decline in revenue in 2012. Only 17 companies with revenues of a billion dollars or more were able to achieve revenue growth of 5%. Among the 25 largest companies, only 7 showed positive dynamics, among them Qualcomm, Broadcom, NXP, Nvidia (Nvidia), MediaTek, Apple and Sharp Electronics. AllWinner, manufacturers of tablet processors, posted the largest revenue gain in 2012.

The market leader is Intel, but its revenue in 2012 in annual comparison decreased by 3% to $50 billion. The business of Samsung, the second largest player, sank 6%. In comparison, Qualcomm's revenue in third place grew 34% to $13.2 billion, largely due to the success of a smartphone processor called Snapdragon in the market.

Supplier number four (by revenue in 2012 Texas Instruments), also reduced revenue by 6%. The company closes Toshiba the top five, whose revenue decreased by 13% compared to 2011.

The study also says that the top 10 vendors in 2012 accounted for 52% of the global semiconductor market, and the first 25 companies earned a total of $206 billion, which is 3% less in annual terms.

Gartner: Market shrank 2.6%

The global semiconductor market reached $299.9 billion in 2012, 2.6% lower than 2011, according to Gartner^[47]. At the same time, although the market as a whole showed negative dynamics, among the top 25 vendors there were those whose business, on the contrary, grew. However, the total revenue of the 25 largest players in the market sank even more than the market itself - by 2.8% in 2012. Their overall market share declined to 68.9% from 69% in 2011.

The thing is, analysts believe that the markets, traditionally drivers of processor sales growth, themselves experienced significant problems in 2012: these are the markets for computer, wireless, consumer electronics and others.

Top 10 semiconductor suppliers by revenue, 2012, $ million

Ranking 2011	Ranking 2012	Vendor	Revenue 2011	Revenue 2012	Growth 2011-2012,%	Share 2012,%
1	1 |Intel	50669	49089	-3,1	16,4
2	2	Samsung	27764	28622	3,1	9,5
6	3	Qualcomm	9998	13177	31,8	4,4
4	4	Texas Instruments	11754	11111	-5,5	3,7
3	5	Toshiba	11769	10610	-9,8	3.5
5	6	Renesas Electronics	10650	9152	-14,1	3,1
8	7	SK Hynix	9388	8965	-4.5	3
7	8	STMicroelectronics	9635	8415	-12,7	2,8
10	9	Broadcom	7160	7846	9,6	2,6
9	10	Micron Technology	7643	6917	-9,5	2,3
		Others	151343	146008	-3,5	48,7
		Total	307773	299912	-2,6	100

Gartner, 2013

In 2012, Intel posted a record 3.1% decline in revenue compared to 2011 due to a decline in PC sales. Still, that hasn't stopped the company from maintaining its leadership in a market it has owned for 21 consecutive years. The company's share in 2012 was 16.4% compared to 16.5% in 2011.

The company became the second in terms of revenue from semiconductor sales Samsung with 9.5%. Qualcomm (4.4%), (Texas Instruments 3.7%) and (Toshiba 3.5%) also entered the top five. Separately, analysts noted the successes that Qualcomm managed to advance from 6th to 3rd place in a year. Among the top 25 players in 2012 are companies. showed the maximum revenue growth - by 31.8%. Samsung and Broadcom also demonstrated positive results.

Japan industry crisis

Main article: Electronics industry in Japan

The Japanese semiconductor industry continues to develop in a downward spiral as competition increases from manufacturers from countries such as Taiwan, South Korea and the United States, according to research firm IC Insights.

Sales of semiconductor products at manufacturing facilities in Japan by vendors such as Toshiba, Renesas Electronics, Sony and Fujitsu decreased by 16% in the second quarter of 2012 compared to the first quarter of the same year.

The weak position of Japanese chip manufacturers is associated with a general system crisis in the computer memory market, in particular the NAND flash memory, which is used in smartphones and tablets, said Bill McClean, president and analyst at IC Insights.

Another negative factor for the Japanese microelectronic industry was the fact that Elpida will soon be acquired by Micron Technology. In early July 2012, this US company announced the imminent purchase of the bankrupt Elpida for $2.5 billion. Despite the fact that Elpida was the dominant company in the memory market during the 1980-1990s. The sale of Elpida means the departure of Japanese manufacturers from the DRAM market, since Toshiba left this business 10 years ago.

Sales of the largest Japanese semiconductor manufacturer, Toshiba, amounted to $2.4 billion in the second quarter of 2012, down 26% compared to the first quarter. At the same time, Toshiba is the sixth largest semiconductor manufacturer in the world after Intel, Samsung, TSMC (Taiwan Semiconductor Manufacturing Co.), Texas Instruments and Qualcomm.

To somehow repel the blow, Toshiba plans to reduce NAND production by 30%. In addition, the company makes integrated components, sensors and other chips whose sales were not so seriously affected, the study said.

In contrast, competing vendors from other countries, such as South Korea's Samsung Electronics and Taiwan's TSMC, are showing significant progress in the semiconductor market, with 100% production capacity and business showing serious growth. In particular, TSMC sales amounted to $4.3 billion and increased by 22% in the second quarter of 2012 compared to the first quarter of the same year.

While sales of Renesas semiconductors, Japan's second-biggest player and the world's seventh-largest, fell 10% in the first quarter of 2012. Semiconductor sales at Fujitsu - fell 23%, while Sony - rose 3%.

Despite the gloomy results of the first half of 2012, McClean believes that Japanese vendors have a good chance to rehabilitate themselves by the end of the year. A common positive for the industry is the imminent entry into the Windows 8 market, which can stimulate sales of smartphones and tablets, as well as the potential success of ultrabooks.

In general, in the world, semiconductor sales in the first half of 2012 reached $105 billion, the forecast for the third quarter is 5% growth compared to the second quarter. According to the results of the second quarter, Intel was named the world's leading player with revenue of $12.4 billion, its revenue growth compared to the first quarter was 5%.

According to the international Semiconductor Industry Association (SIA), in August 2012, global semiconductor sales reached $24.30 billion, which is only 0.1% more than in July, when all kinds of chips were sold by $24.27 billion. However, compared to August 2011, when sales amounted to $25.1 billion, this figure decreased by 3.2%.

From the beginning of 2012 to August, inclusive, total sales, according to SIA, were at the level of $189.46 billion, and this is 4.6% lower than the same indicator for the previous year.

August annualized figures and sales for the 8 months of this year decreased in all regions of the world, with a slight decrease in the Asia-Pacific region and Japan, and a more significant drop was recorded in Europe and both American continents.

However, in August relative to July, sales on the American continents increased by 1% (for the first time since April 2012). In Japan, sales also increased by 1% in August, but in Europe they fell by 1.9%. According to SIA analysts, the situation in the United States may improve after the elections in November, when the uncertainty in business will be somewhat removed.

Samsung and Apple are the biggest consumers

Gartner experts cite data according to which at the end of 2012, the consumption of semiconductor products from Samsung and Apple jointly amounted to $45.3 billion, which is $7.9 billion more than in 2011, and, as already mentioned, accounts for 15% of the total semiconductor consumption in the world in 2012.

Analysts point out that although Samsung and Apple are showing good consumption of the products of the market in question, other major manufacturers of electronic equipment in the world did not go so well in 2012. In particular, six vendors from among the "top 10" global consumers of semiconductor products last year reduced the volume of demand for products.

Both the general unstable macroeconomic situation and the sharp change in priorities in terms of consumer demand contributed to this development of the situation. "The PC market is still the largest segment for the chip market. However, both stationary and mobile PCs did not sell well last year. Consumer interests have shifted towards new mobile devices such as smartphones and tablets. This shift in interest led to a decrease in demand for semiconductor products in 2012, since the required number of products under consideration in smartphones and "tablets" is significantly less than that of PCs, "says Gartner lead analyst Masatsune Yamaji.

Gartner experts also note that since the growth in demand for mobile devices (smartphones and "tablets") cannot fully compensate for the decrease in demand for semiconductors from the PC market, at this stage the data center and communication infrastructure markets continue to be drivers of the growth in demand for semiconductor components. The limited storage resources and computing resources of new mobile devices will be compensated for by "cloud" services running through applications that do not require significant computing power.

According to Gartner, global profits in the semiconductor component sales market amounted to $297.6 billion in 2012. This figure is 3% lower than in 2011 ($306.8 billion). At the same time, according to the results of 2012, the share of the main consumers included in the "top 10" collectively accounted for $106.4 billion, which is about 36% of total sales.

Places in the global ranking of the "top 10" in terms of semiconductor consumption in 2012 were distributed according to Gartner as follows: Samsung took the lead, beating Apple, which topped the rating back in 2011. At the end of 2012, Samsung's semiconductor purchases amounted to $23.9 billion. This means 28.9% growth when comparing "year-on-year." Samsung's share is estimated at 8%.

Apple moved to second place, which at the end of the period under review showed an indicator of $21.4 billion and an increase of 13.6% compared to 2011. Apple's share of the total is estimated at 7.2%.

HP became the third in 2012 with an indicator of $14 billion and this means a decrease of 12.7% compared to 2011. Gartner experts estimate HP's share as 4.7% of the total. In fourth place is the Dell vendor with a result of $8.6 billion in 2012. In this manufacturer, the decrease in the indicator compared to 2011 was 13.4%. Dell's share of the total is estimated at 2.9%.

The fifth and sixth places in the "top 10" of the world semiconductor consumers in 2012 are occupied by Sony and Lenovo. At the same time, Sony rose significantly in the ranking (in 2011 it ranked eighth) and at the end of 2012 showed an indicator of $7.9 billion and an increase of 1.9% compared to 2011. Sony's share of the total is estimated at 2.7%. Lenovo has risen in the ranking by one position and its figure is $7.8 billion, and its mouth for the year is 0.3%. The share of this vendor is estimated at 2.6% in 2012.

In seventh, eighth and ninth places at the end of 2012, they were located Toshiba with an indicator of $6.5 billion, LG Electronics with an indicator of $6 billion Cisco and with an indicator of $5.4 billion. All three vendors demonstrated negative growth dynamics compared to 2011. So, Toshiba's decline was 17.1%, LG Electronics's - 6.7% and Cisco's - 0.8%. The shares of these vendors are estimated at 2.2% for Toshiba, 2% for LG Electronics and 1.8% for Cisco.

Of the "top 10" vendors, the largest decrease in the indicator in 2012 is observed in. Nokia Corporation This company is in tenth place, while back in 2011 it was in fifth place in the ranking. The figure under consideration Nokia was $5 billion, which means a decrease of 42.6% compared to 2011. Nokia's share is estimated at 1.7% of the total.

The share of companies falling into the "rest" category at the end of the past year accounts for 64.2% of the total volume of the market under consideration, and the indicator for the purchase of semiconductors in 2012 in this category amounted to $191.1 billion (a decrease of 4.3% compared to 2011).

Unfulfilled forecasts

After the first quarter of 2013, leading analytical companies summed up the final results of the semiconductor market for 2012. So, the IDC calculated that in 2012 it decreased by 2.2% to $295 billion, Gartner also recorded a decrease of 2.6% to $299.9 billion.

Since the computer technology market, adjacent to the semiconductor market, experienced a permanent crisis in 2012, until recently there was an intrigue about how much depressive this circumstance will have on the chip manufacturing market, which is an important part of the IT industry in North America and Asia.

As a result, among the previously published forecasts for 2012, not a single one hit the point. Moreover, analysts at IHS iSuppli in December 2012 hoped that the market would decline by 2.3% to $303 billion, and even earlier, in August, they promised only a 1.7% decrease in market volume. By the end of the year, hopes for a fix were fading. Be that as it may, IHS iSuppli's forecast for the chip market for 2013 remains more than optimistic - an increase of 9% by 2013.

Interestingly, in mid-2012, even Gartner published a forecast according to which the global chip market will reach $316 billion in 2012, which is 4% more than 2011. Global capital expenditures on semiconductors, according to Gartner forecasts, in 2012 will amount to $35.2 billion, which is 19.2% lower than in 2011 - $43.5 billion. The updated data on capital expenditures have not yet been made public.

According to Klaus' Rinnen, Managing Vice President of Gartner, the decline in volumes will be observed in all sub-segments of the market. And while the race in the 28 nanometer (nm) format will continue, the costs of the 45-90 nm technology will be reduced. For example, this will be due to less than previously expected growth in the production of tablets and other devices.

Global Semiconductor Capital Expenditures, 2009-2015, million dollars

Gartner, 2011

Capital expenditures on equipment in the field of global semiconductor production in 2012 are expected to amount to $51.7 billion, which is 19.5% less than the projected costs at the end of 2011 - $64.2 billion, the analytical company Gartner concludes.

Capital expenditure dynamics in the global semiconductor industry

	2010	2011	2012	2013	2014	2015
Semiconductor Industry Capex (US $ Million)	56,526.2	64,242.7	51,706.5	61,624.5	63,549.4	60,966.0
Growth	118.4%	13.7%	19.5%	19.2%	3.1%	4.1%
Major Equipment (US $ MM)	40,639.1	43,200.0	34,010.5	42,528.9	43,893.6	41,664.5
Growth	142.7%	6.3%	21.3%	25.0%	3.2%	5.1%
WFE Equipment (US $ MM)	31,624.7	34,729.6	26,764.0	33,119.3	34,729.9	31,886.4
Growth	145.5%	9.8%	22.9%	23.7%	4.9%	8.2%
Test Automation Equipment (US $ MM)	2,859.8	2,688.3	2,245.4	3,096.4	3,002.3	3,169.8
Growth	148.7%	6.0%	16.5%	37.9%	3.0%	5.6%
Other Expenses (US $ MM)	15,887.0	21,042.7	17,696.0	19,095.6	19,655.7	19,301.5
Growth	73.9%	32.5%	15.9%	7.9%	2.9%	1.8%

Gartner, 2011

According to Gartner data presented in the table, in 2012 the decline will affect all segments without exception, and already in 2013 none of them will develop with a minus sign. Although already in 2014-2015, minor downward fluctuations may occur in a number of segments.

The decline in the semiconductor market is forecast by Gartner to take the rest of this year and the first half of next year. After that, supply and demand are balanced due to the stabilization of the economy. Already in 2013, capital expenditures on semiconductors are expected to increase by 18.4%. In 2014 - an increase of 2.4%, and in 2015 - a new decline, but not as sharp as in 2012 (5.1%).

2011

Market growth 3.7% to $301 billion - IDC

Despite the unstable economic situation in the United States and European countries, earthquakes and tsunamis in Japan, flooding in Thailand, the global semiconductor market in 2011 grew by 3.7% to $301 billion, IDC said. The main reasons for the increase in revenue of component base manufacturers are the increased demand for a variety of electronic devices: smartphones, tablets, laptops, servers, automated infotainment systems. In 2012, according to IDC, growth may be even more - from 6% to 7%.

The first place with revenues of $51.8 billion is occupied by Intel. The semiconductor giant during 2011 managed not only to increase earnings, but also increased market share by 3%. The second place is occupied by Samsung - the revenues of the Korean manufacturer reached $29 billion. The top five is closed by Texas Instruments, Toshiba and Renesas Electronics.

The results of the IDC are the same as previously published data from the reports of Gartner and IHS Markit (formerly IHS Inc. and Markit Ltd.) iSuppli. Research companies celebrate Intel's success in a number of areas - the vendor has made good money selling components for PCs and servers and flash memory. The $1.4 billion acquisition of Infineon Technologies' mobile chip division also benefited the corporation.

This year, Intel intends to clearly identify its presence in the segment of compact mobile devices. So far, the vast majority of smartphones and tablets run on ARM Holdings architecture processors, which Qualcomm, Samsung, Texas Instruments and Nvidia (Nvidia) have significantly succeeded in producing. Intel has already taken the first step along this path - on April 23, Lava International introduced the XOLO X900 smartphone on the Indian market, built on the Intel Atom Z2460 platform (codenamed Medfield).

The recently officially unveiled new Ivy Bridge platform will obviously find application not only in ultrabooks - Intel's popularized variety of very thin and light laptops - but also in tablets.

IHS: Semiconductor Market Players TOP-25

According to the latest IHS research of the semiconductor market, in 2011 Intel managed to increase its share by 2.5% and bring it to 15.6%. This is the highest figure in the last 10 years. The previous record of the corporation dates from 2001, then its share was 14.9%, in the last five years it ranged from 11.9% to 13.9%.

Dale Ford, head of research for the electronics and semiconductor markets at IHS, considers the increase in demand for microprocessors for PCs and NAND flash memory for consumer electronics devices and wireless products to be the reason for the emerging growth. The acquisition of Infineon, a wireless technology division responsible for manufacturing chips for mobile devices, had a positive impact on the increase in profitability indicators.

Shares of TOP-25 players in the semiconductor market at the end of 2011 (income of $ million). Source IHS iSuppli, March 2012.

All this allowed Intel to significantly increase its gap from Samsung Electronics (Samsung Electronics Rus), the second largest supplier of semiconductor components. Up to this point, the gap between the companies has gradually narrowed, Samsung's share has grown from 3.9% in 2000 to 9.2% in 2010. However, at the end of 2011, the profit of the South Korean manufacturer increased by only 0.6% against 20.6% for Intel, and the gap was again tangible.

Outstanding showed the growth of profitability managed to demonstrate Qualcomm and ON Semiconductor, the companies played into the hands of a number of successful acquisitions. In 2010, Qualcomm occupied only ninth place in the market - now it managed to immediately move to sixth with a share of 3.3%, which is slightly less than Renesas Electronics. ON Semiconductor a year ago was not at all one of the TOP-25 manufacturers of semiconductors, but now the company is in 18th place.

In general, the semiconductor market grew by 1.3% - this is slightly less than the preliminary estimate announced by IHS on December 1, 2011 at 1.9%.

IHS iSuppli Forecast

In September 2011, research firm IHS iSuppli projected that the global semiconductor market would grow by 2.9% compared to 2010. Two months later, analysts lowered their forecast by more than half to 1.2% year-on-year.

Dale Ford, vice president of iSuppli, said global manufacturers' third-quarter revenue was strong enough - 3.5% above similar second-quarter numbers. And in the last three months of 2011, the revenue of vendors is expected to decrease by 2% compared to the third quarter.

At the same time, according to Ford, even a slight increase of 1.2% at the end of the year is good news for the market, more psychologically, since the decline, and quite serious, was expected in the third quarter, and vendors were simply afraid of failed results at the end of the year.

The main difficulties in the market arose in March 2011, when the computer chip industry came under the influence of the consequences of the devastating earthquake and tsunami in Japan. Then the production capacities of many manufacturers, as well as the transport infrastructure, suffered. A few months after the disaster, most production was moved outside the affected area, so that the situation began to gradually improve.

According to iSuppli, the main segment that pulls down the entire semiconductor market is the memory device segment - DRAM, SRAM and NOR. Revenues from Flash memory sales will decrease by 15% at the end of this year. Analysts expect that in 2012 the situation in this segment will not change.

Meanwhile, there is good news. They concern microprocessors, image sensors and some other devices. In these segments, manufacturers' revenue in 2011 is projected to grow by more than 15%.

Zeus Kerravala, lead analyst at ZK Research, agrees with iSuppli's findings, although he believes economic hardship will continue to impact this market globally in 2012. 'The difficult times are not going to end. Europe is a mess. In the United States, IT spending goes down sharply, "he said.

According to Kerrawal, the semiconductor market usually acts as an indicator of the state of macroeconomics. In his opinion, the beginning of 2012 will be "weak" for manufacturers.

The largest consumers of chips in 2011

Leading manufacturers of electronic products remained at the center of the conductor industry in 2011: according to Gartner, they accounted for $105.6 billion of all semiconductors produced on the market (total available market, TAM) or 35% of the profit of microchip vendors. Compared to 2010, this figure increased by 1.8% or $1.8 billion in monetary terms.

According to Masatsune Yamaji, an analyst at Gartner, the main driver of the semiconductor market in 2011 was, smartphones tablets and. SSD

"Companies actively increasing their share in the smartphone market, such as Apple, Samsung Electronics (Samsung Electronics Rus) and HTC, respectively, increased demand for semiconductors, and those whose market share decreased (Nokia Corporation) showed a decrease in demand," he said.

At the same time, according to him, predicting the level of demand, semiconductor manufacturers need to accept not only today's leaders in the consumer electronics market, but also new promising players who can become leaders tomorrow.

TOP-10 of consumers of semiconductors in the world, $ million

Source: Gartner, January 2012

Among the TOP-10 global consumers of semiconductors in 2011 were three American companies, three companies in the Asia-Pacific region, three companies from Japan and one company from the EMEA region. At the same time, Apple became the leading consumer, achieving significant growth. However, the company has been among the leaders for the past five years, but at the same time in 2010 it was only the third in the ranking.

See also

Semiconductor lasers

Notes