March 15, 2007 – IC Insights today released its ranking of the Top 25 worldwide semiconductor (ICs and OSDs — optoelectronics, sensors, and discretes) sales leaders for 2006 (see table below). This list is a portion of the top 50 semiconductor supplier ranking that will be released in the upcoming March Update to The McClean Report. For the Top 25 suppliers, the research firm says, it was “a year of the haves versus the have-nots.” Although six of the 25 suppliers posted revenue spikes of greater than 35% in 2006, about one-third of the companies (eight) registered below-average sales growth (i.e., less than 9%) last year.
A 32% increase in the DRAM market resulted in a surge in sales at Hynix, Qimonda, and Elpida. Sony also received a big boost in its 2006 semiconductor sales due to large gains in internal transfer revenue from its Playstation 3 game console ramp-up.
AMD’s 44% jump in 2006 sales was driven by its noticeable microprocessor market share increase (though AMD is still about one-sixth the size of Intel) as well as its second-half 2006 acquisition of ATI. IC Insights believes that when including full-year sales for the former ATI business, AMD will move into the Top 10 ranking in 2007. Fabless supplier Broadcom continues to ride the communications wave with a strong presence in the networking, broadband, and mobile and wireless product segments. While Broadcom’s 37% 2006 growth rate is impressive, even more impressive is the company’s 2001-2006 average annual growth rate of 31%.
With nine suppliers headquartered in the U.S., eight in Japan, four in Europe, two in Taiwan, and two in South Korea, the list of major semiconductor suppliers contains a broad representation of geographic regions. The Top 25 listing also includes two pure-play foundries (TSMC and UMC) and three fabless companies (Qualcomm, Broadcom, and Nvidia). Essentially all of the Top 25 semiconductor companies had semiconductor sales of at least $3 billion in 2006, about the same dollar amount needed to construct a high-volume 300mm wafer fabrication facility.
Despite a 9% decline in its 2006 sales, Intel easily maintained its hold on the No. 1 spot, having about 64% greater semiconductor sales than second-place Samsung (down from about double Samsung’s sales in 2005). After growing at about twice the industry rate in 2005, Intel posted the biggest sales decline of any Top 25 ranked company in 2006. Because of Intel’s big decline in sales, in total, the Top 10 semiconductor companies showed only a 6% sales increase in 2006, while the Top 25 posted an 11% jump, two points above industry-average growth.
The former Philips Semiconductor — now NXP — moved up to No. 10 last year from No. 11 in the full-year 2005 listing. NEC fell from being ranked 10th in 2005 to 12th in 2006. IC Insights notes that six of the eight Top 25 suppliers that lost positions in the 2006 ranking were Japanese companies (the other two companies that slipped in the rankings were Micron and Infineon).
Infineon and its spin-off Qimonda each had more than $5 billion in sales in 2006. Combined, the companies’ sales would have been $10.5 billion, which would have been large enough for it to be ranked as the fourth-largest semiconductor supplier in the world in 2006. In fact, with Infineon currently holding about 85% of the stock in Qimonda, there are some who believe the two companies’ sales figures should still be combined.
The 2007 edition of IC Insights’ McClean Report — A Complete Analysis and Forecast of the Integrated Circuit Industry, is now available for purchase. Visit IC Insights for details.