December 18, 2012, anysilicon
This post describes the growth of top 10 semiconductors companies in the last 10 years. It tracks the growth of the 10 semiconductor leaders from 2002 to 2011 and shares some nontraditional thoughts about the ten semiconductors vendors’ success:
Since the 80’s companies from USA, Europe, Japan and Korea competed on becoming part of the top 10 semiconductor suppliers. Some have been on top and vanished, and some have followed the market trends successfully and maintained a strong leadership position.
Americans, Japanese, Koreans and Europeans have different methods to drive innovation, development and production. They all share the same goal but underneath the skin they are totally different. They have different cultures, different management styles, different execution methods and even different views on working hours and number of vacation days. Apparently — and only based on the analysis — all the different approaches are somewhat effective.
It is not a secret that Intel is the largest semiconductor company today and was in this position for the last 20 years. But prior to 1993 Intel was not the leader — it was NEC (with 2B$ sales). Since then, NEC merged with Renesas and two became Renesas Electronics.
Samsung was never considered a threat to Intel, but today Samsung is all over the place. It provides the entire supply chain, from silicon foundry services to delivering consumer products such as tablets, phone and more. Samsung is clearly mastering the supply chain end to end — from building a 28nm semiconductor foundry to delivering high-end smartphones. It’s impressive to see how Samsung can compete simultaneously with TSMC’s on foundry services and with Apple on smartphone products.
The mobile and communication markets are the key to the success of companies such as Broadcom and Qualcomm. They both offer a very comprehensive portfolio of IC products and a clear competitive advantage in specific areas. Their goal is to sell as many ICs as possible into the same electronic products (e.g smartphone) by using a Bundling Product strategy. This mean they will offer a very aggressive price for 3-4 devices (for example: WiFi, Bluetooth and CPU) as a bundle in order to keep the competition out. The comprehensive product lines allow them to use this strategy and gain more strength so they will keep developing more products or/and acquire semiconductor companies.
Apple and Samsung are the top players in the mobile market. This means that the companies listed below have a footstep in one or several of their products. Dealing with leaders such as Apple and Samsung proves to be rewarding in both the short and long runs. However, both Apple and Samsung has chosen to build internal ASIC capabilities in various areas (processing, wireless, memory) in order to enhance their core competence. This is obviously bad news to the current ASIC suppliers.
The analysis clearly shows that Intel and Samsung are doing well. It’s a bit difficult to see what happens below 20B$ due to clutter. Therefore, the 2nd graph, which provides this insight.
Let’s forget about Intel and Samsung for a moment and look at the companies below 20B$. TI and Toshiba are very close to 14B$. Renesas is coming back into the top 5 semiconductor companies.
Another way to examine growth is by examining the top 10 semiconductor players and calculating their growth in percent since 2005. The table below shoes that overall, Qualcomm had the highest growth (more than doubling their business), while STM had the lowest growth. It is still impressive to see the positive growth of all companies, they are all increasing market share and following the right strategy.
Intel’s growth is only 29%. Just that this 29% represent 15B$ which equals TSMC sales revenue in 2012.
From time to time, it is inspiring to look back and see how the semiconductor industry is evolving over time. I hope you share the same excitement. If so, I’ll be happy if you share this post.