August 2, 2006 – The top suppliers of semiconductors welcomed new neighbors in 1H06 — pure-play foundry giant Taiwan Semiconductor Manufacturing Co. (TSMC) and fabless giant Qualcomm, which vaulted to the ranks among leading chip suppliers in 1H06, according to the latest rankings from IC Insights Inc.

There were no surprises among the top three chip suppliers in 1H06 — Intel ($15.26 billion), Samsung ($8.95 billion), and Texas Instruments ($6.77 billion) held their usual positions, and are expected to stay there through the rest of the year, noted the analyst firm. TSMC ($4.91 billion) jumped from eighth place to fourth, while Toshiba ($4.47 billion) fell from fourth to seventh place.

After the top three, though, things get tight, and there is plenty of wiggle room for shakeup. Only $60 million separated fourth-place TSMC from sixth-place STMicroelectronics, while Freescale ($3.00 billion) and Philips ($2.99 billion) essentially tied for 10th place, although IC Insights expects Philips will wrest the 10th-place spot by year’s end, based on 3Q and 4Q sales projections.

Sales by quarter showed the results of Intel’s inventory problems and an ongoing price war with rival AMD — Intel’s 2Q06 sales dipped 10% from 1Q06, while AMD saw a -9% slide. IC Insights noted, however, that it expects Intel’s FY06 semiconductor sales to be down at least 10%, while AMD is on pace for a 42% increase. The top 10 chipmakers saw flat sales in 2Q vs. 1Q at $60.24 billion, while the top 15 collectively posted a 1% sales increase during the quarter.

Demand for cell phones continues to be red-hot — IC Insights projects shipments will grow 18% this year to 950 million units — and that’s given a big boost to CDMA/WCDMA semiconductor supplier Qualcomm, which rode an 11% sales increase in 2Q to slide into the No. 15 spot. The firm could post sales of $4.5 billion for FY06, representing 30% growth from a year ago, and also providing more evidence of the growing success of the fabless business model, noted the analyst firm.

Comparing 1H06 sales to total FY05 sales shows that overall, business is roughly on pace with a year ago. The top 10 chipmakers’ 1H06 sales of $118.43 billion represent 51% of FY05 sales, while for the top 15, 1H06 sales of $141.96 billion represents 52% of FY05 sales. Taking into account the top 15 companies’ projections for 3Q06 and IC Insights’ estimates for their 4Q06 sales, the firm estimates these companies will post 8% growth in chip sales this year vs. 2005.

Top 15 worldwide semiconductor supplier rankings
(Sales in US $M)

1H06 rank……2005 rank……Company……………1H06 sales……..2Q06/1Q06 sales % change……..2005 sales……….1H06 as a % of FY05 sales

1……………1……………Intel………………..15,255……..-10%……..35,395……….43%
2……………2……………Samsung……………8946……….5%………17,838……….50%
3……………3……………TI……………………..6765……….8%………11,300……….60%
4……………8……………TSMC*……………..4911……….6%………..8217………..60%
5……………6……………Infineon……………..4872……….3%………..8297………..59%
6……………5……………ST…………………….4854……….5%…………8870………..55%
7……………4……………Toshiba……………..4471………-7%…………9045……….49%
8……………7……………Renesas……………..4013……….4%…………8266……….49%
9………….10……………Hynix………………..3157……….7%…………5599……….56%
10………..11……………Freescale……………3000……….5%…………5598……….54%

–………….–……………Total top 10……..60,244……….0%…….118,425……….51%

11………..11……………Philips……………….2999……….5%……….5598……….54%
12………..12……………NEC………………….2767……….0%……….5593……….49%
13………..13……………Micron………………2570……….7%……….4954……….52%
14………..16……………AMD………………..2548………-9%……….3936……….65%
15………..18……………Qualcomm**………2151………11%………3457……….62%

–………….–……………Total top 15……..73,279……….1%…..141,963……….52%

*Foundry
**Fabless

Source: IC Insights Inc., company reports