The semiconductor shortage is causing pain to manufacturers that can’t find enough chips, but it’s been a boon to the global IC industry. The 2021 revenue of the top 10 global IC suppliers grew 48 percent from 2020 to reach $127.4 billion, according to TrendForce.
The chip industry as a whole reached $583. 5 billion, according to Gartner, a 25 percent increase from the prior year. Both research firms pointed to price increases as one driver of growth.
“Vigorous stocking of various terminal applications caused a shortage of wafers in 2021, so the industry was severely undersupplied,” according to TrendForce. This, coupled with spiking chip prices, boosted chipmakers’ revenue. Strong demand as well as logistics and raw material price increases drove semiconductors’ average selling price (ASP) higher, said Gartner.
Component manufacturers expect to increase prices this year between 7 percent and 8 percent in 2022, according to IPC.
Research firm IBISWorld notes component prices typically decline over time. That tend has reversed and IBISWorld forecast the price of semiconductors and electronic components would increase at an annualized rate of 1.1 percent over a five-year period through 2022.
Price increases have been implemented since the beginning of the year and are not expected to abate, with a few possible exceptions in memory components. The combination of strong demand and well-documented supply-chain disruptions contributed to a 6 percent increase in ASPs for analog ICs last year, according to IC Insights. They are projected to grow another 1 percent in 2022.
Positioning for growth
Strategic moves by chipmakers, of course, can’t be discounted. Nvidia surpassed Broadcom to become No. 2 in the TrendForce ranking. Taiwanese companies Novatek and Realtek rose to sixth and eighth place, respectively. Originally ranked tenth, Dialog was replaced at this position by Himax after Dialog was acquired by IDM giant Renesas.
Qualcomm continues its reign as number one in the world, primarily due to 51 percent and 63 percent growth in sales of mobile phone SoC and IoT chips, respectively. The addition of diversified development in its RF and automotive chip businesses were key to a 51 percent increase in revenue.
Nvidia implemented an integration of software and hardware, demonstrating its ambitions in creating a “comprehensive computing platform.” Driven by annual growth of gaming graphics card and data center revenue at 64 percent and 59 percent, respectively, Nvidia successfully climbed to second place.
Broadcom benefited from the stable sales performance of network chips, broadband communication chips, and storage and bridging chips, with revenue growing 18 percent.
AMD’s computer and graphics revenue grew by 45 percent due to strong sales of the Ryzen CPU and Radeon GPU and rising average selling price. Coupled with accelerating demand from cloud companies, the annual revenue of AMD’s enterprise, embedded, and semi-customized divisions increased by 113 percent, driving annual growth of total revenue to 68 percent.
MediaTek’s strategy of focusing on mobile phone SoC has produced “miraculous results,” according to TrendForce. Benefiting from an increase in 5G penetration, sales performance of MediaTek’s mobile phone product portfolio surged by 93 percent and the company has committed to increasing the proportion of high-end product portfolios, resulting in 61 percent annual revenue growth.
Novatek’s two major product lines of SoC and display driver ICs have both grown significantly. Due to improved product specifications, increased shipments, and beneficial pricing gains, revenue grew by 79 percent, highest among the top 10. Realtek has been driven by strong demand for Netcom and commercial notebook products, while the performance of audio and Bluetooth chips remains quite stable, conferring an annual revenue growth of 43 percent.
Himax joins the top 10 ranking for the first time in 2021. Due to significant annual revenue growth in large-sized and medium/small-sized driver ICs of 65 percent and 87 percent, respectively, and the successful introduction of driver IC into automotive panels, total revenue exceeded $1.5 billion.
Factors in 2022
Looking forward to 2022, after AMD completes the acquisition of Xilinx, other players will fill out the rankings, said TrendForce. In the broader picture, intensifying demand for high-specification products such as high-performance computing, netcom, high-speed transmission, servers, automotive, and industrial applications will create good business opportunities for IC design companies and drive overall revenue growth.
However, terminal system manufacturers face the correction of component mismatch issues. In addition, growing foundry costs, intensifying geopolitical conflicts, and rising inflation will all be detrimental to global economic growth and may impact an already weakened consumer electronics market.
“These are the challenges IC design companies face in 2022 and by what means can product sales momentum be maintained within existing production capacity, R&D efficacy strengthened, and chip specifications upgraded will become the primary focus of development in 2022,” said TrendForce.
Analog IC manufacturers should see another year of double-digit in 2022, according to IC Insights. Analog sales surged by 30 percent in 2021.
Total analog IC sales are forecast to rise 12 percent to $83.2 billion in 2022, with unit shipments increasing 11% percent to 238.7 billion. The average selling price of analog ICs is projected to grow 1 percent in 2022.
The analog market’s extraordinary increase of 30 percent in 2021 lifted sales to an all-time high of $74.1 billion. IC Insights’ Q1 update shows analog unit shipments climbed 22 percent in 2021 to a record-high level of 215.1 billion.
Every major general-purpose analog and application-specific analog market category tracked by IC Insights is forecast to post a sales increase, ranging from 7 percent growth in the amplifiers and comparators segment to 17 percent growth for automotive application-specific analog ICs.