Top 20 semiconductor companies by revenue recorded healthy growth, says GlobalData

  • Year-on-Year (YoY) cumulative revenue of the top 20 semiconductor companies by revenue increased 8.4%
  • Despite the COVID-19 crisis, 45% of the companies reported double-digit growth in 2020

The semiconductor sector gained traction in H2 2020 due to rising demand for computer-centric products, game consoles and internet of things (IoT) devices, as well as increasing investment in wireless communications, AI and 5G technology, according to GlobalData. The leading data and analytics company notes that this shift enabled the majority of the top 20 semiconductor firms by revenue to register considerable growth in 2020: a year marked by macroeconomic challenges and supply chain constraints.

Keshav Kumar Jha, Business Fundamentals Analyst at GlobalData, comments: “A whopping 80% of the top 20 reported YoY revenue growth, with companies such as NVIDIA, Advanced Micro Devices (AMD), MediaTek, Taiwan Semiconductor Manufacturing Company (TSMC) and United Microelectronics (UMC) registering over 25% YoY growth.”

Jha lists some of the key companies within the ranking to note the developments behind their success:

NVIDIA: Gaming processors driving sales growth

An increase in the sales of graphics processing units (GPUs) for PC gaming and system on a chip (SOC) formats for game consoles, alongside a 124% increase in data center revenue, helped NVIDIA register YoY growth in revenue.

The acquisition of Mellanox and the ramping up of the NVIDIA Ampere GPU architecture products into vertical industries enabled the company to report higher sales in the computer and networking segments.

AMD and USC: Posted better net profit

An increase in demand for Ryzen processors and EPYC server processors, along with rising average selling price, helped AMD clock 45% YoY growth in revenue, while a 24% increase in foundry wafer shipment helped UMC record double-digit growth.

AMD and UMC were the two companies that reported over 200% YoY growth in profitability. AMD’s net income was up mainly due to income tax benefit of $1.3bn associated with a valuation allowance release, whereas higher revenue allowed UMC to register significant improvement in its net earnings.

MediaTek and TMSC: Riding high on demand for its 4G and 5G products

MediaTek gained traction due to the increase in demand for its 4G and 5G products. The sales of its consumer electronic products such as Wi-Fi equipment, Power ICs and TVs also increased during the year. Accelerated digital transformation in the wake of COVID-19 led to growth in demand for high-performance computing platforms from TSMC. Besides, TSMC reported growth due to increase in demand for 5G smartphone and IoT platforms.

Micron and Analog Devices: Sales hit hard by pandemic

Micron and Analog Devices were the only two companies in the ranking that reported over 5% decline in revenue. Apart from a fall in the selling prices of DRAM and NAND, the detrimental effect of the COVID-19 pandemic on automotive, industrial, and consumer segments led to a decline in Micron’s YoY revenue. The pandemic-related decline in automotive and consumer end markets also led to a decrease in the YoY revenue of Analog Devices.

Mike Orme, Consultant of Thematic Research at GlobalData, comments: “2021 is proving to be nothing like 2020’s white-knuckled ride. However, unless overall demand dips unexpectedly, foundry capacity and allocation will remain tight. The Asian foundries of two companies, TSMC and Samsung, essentially call the shots over global chip supplies and they’ve been caught short of capacity – hence the global chip shortage. They – as well as Intel, GlobalFoundries and China’s SMIC – are all now embarked on spending tens of billions to build new capacity, with some of it in the US and Europe. However, it takes three to four years to bring a fully debugged new plant on stream. Therefore, it’ll be 2023 or 2024 before we see any marked loosening on the supply side and softening of prices.”

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