August 2, 2012 — IC Insights released a Q2 update to its top-20 ranking of semiconductor companies. Three pure-play foundries are in the top 20 ranking, with a cumulative increase of 20% from Q1 2012 to Q2 2012.

As fabless companies continue to thrive, and many integrated device manufactures (IDMs) move to a fab-lite business model, IC foundries will continue to see strong demand over the next few years. 

TSMC’s capacity utilization rate in 2Q12 was 102% (exceeding 100% because of the way the company defines its utilization rate).

GLOBALFOUNDRIES’ 2Q12 sales jumped by 18%, which helped move the company past UMC to become the second-largest foundry in the world. GlobalFoundries is ranked as the 16th largest semiconductor supplier worldwide. IC Insights believes the company has a good chance of surpassing Fujitsu in the rankings in full-year 2012 sales.

Table 1. H1 2012 top 20 semiconductor companies, by sales (including foundries). Revenue in $M. SOURCE: IC Insights.

The combined sales of the 4 Japanese companies in the top 20 ranking (Toshiba, Renesas, Sony, and Fujitsu) dropped 16% sequentially, with Sony being the only Japanese company to register quarterly growth. This region may see a boost in Q3.

Renesas is currently expecting a sequential semiconductor sales increase of 24% in Q3.

Toshiba has not yet changed its relatively aggressive full-year fiscal 2013 (ending March 2013) guidance, which suggests it may be expecting a strong rebound in sales later this year.  

When Micron (#9) completes its acquisition of bankrupt Elpida (#24), the memory maker likely will add $2.5 billion to $3.0 billion in revenue annually. This could bump Micron up in the rankings by as many as 2 slots.

There was a wide range of sequential quarterly growth rates among the top 20 semiconductor suppliers. In total, the top 20 semiconductor suppliers showed a 3% increase in Q2 sales over Q1. The entire worldwide semiconductor industry growth rate was 6%. When excluding the top three foundries — TSMC, GLOBALFOUNDRIES, and UMC — combined sales of the top companies logged an increase of only 1% sequentially.

Table 2. H1 2012 top 20 semiconductor sales leaders ranked by growth rate (including foundries. Revenues in $M. SOURCE: IC Insights.

As shown, Toshiba ranked as the worst performing top-20 company in 2Q12, registering a steep 26% 2Q12/1Q12 sales decline.  This drop was due almost entirely to the poor performance of its memory segment (primarily NAND flash), which saw a dramatic 40% 2Q12/1Q12 sales collapse (a decline of about $800 million).  As has been recently reported, the company plans to cut its NAND flash production by 30% in response to this situation.  In contrast to its memory sales, Toshiba’s 2Q12/1Q12 logic IC sales were down only 9% and its O-S-D (optoelectronics, sensors, and discretes) sales were flat.  It is interesting to note that SanDisk, Toshiba’s NAND flash memory partner, encountered a much more moderate 2Q12/1Q12 sales decline of 14%.

After reviewing the top 20 companies’ 3Q12 outlooks, it appears that the top 20 semiconductor suppliers, in total, are likely to show a 5% increase in sales in 3Q12 as compared with 2Q12.  While this level of growth is not very exciting, it is only one point below the past 30-year average third quarter total semiconductor market increase of 6%.

Several major product introductions are set to occur in 4Q12 that could potentially bring additional momentum to the semiconductor market at the end of this year.  The release of Apple’s newest version of its iPhone (iPhone 5) is expected no later than October.  Moreover, Microsoft’s Windows 8 operating system is the first major upgrade to its OS in several years and is scheduled to be released in 4Q12.  Also, Intel reports that numerous new ultra-thin but powerful Ultrabook computers will debut in 4Q12, some priced as low as $699. In total, IC Insights expects a 4Q12/3Q12 semiconductor sales increase of 2% and a full-year 2012 semiconductor market increase of 3%.

A ranking of the 1H12 top semiconductor suppliers will be included as part of IC Insights’ upcoming August Update to The McClean Report. IC Insights has released the new 200+ page Mid-Year Update to the 2012 edition of The McClean Report. To review additional information about IC Insights’ new and existing market research products and services please visit our website: www.icinsights.com.

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