Broadcom


2021-06-10

Global Cryptocurrency Mining Craze Becomes Key to Nvidia Overtaking Broadcom in Revenue for 1Q21, Says TrendForce

While foundry capacities remained tight, prompting IC design companies to compete over limited foundry capacities in order to fulfill rising demand for various end devices, the top 10 IC designe (fabless) companies posted remarkable revenues in 1Q21, according to TrendForce’s latest investigations. In particular, thanks to the global mining craze brought about by the cryptocurrency market, Nvidia was able to surpass Broadcom in revenue and take the second spot among the top 10. On the other hand, fifth-ranked AMD scored a staggering YoY growth of 92.9%, which is the highest % increase on the top 10 list.

Market leader Qualcomm saw growths in its smartphone, RF front end, IoT, and automotive departments in 1Q21, during which it posted a revenue of US$6.28 billion, a 53.2% increase YoY, placing Qualcomm firmly in the number one spot. Coming in second place is Nvidia, which overtook Broadcom with $5.17 billion in revenue. Nvidia’s revenue performance can primarily be attributed to massive gaming graphics card demand generated by the cryptocurrency market and the stay-at-home economy. In addition, Nvidia’s Cloud & Data Center business also saw positive growths in 1Q21, thereby contributing to its revenue for the quarter as well.

Broadcom, ranked third on the top 10 list, posted a $4.49 billion revenue in 1Q21. Broadcom’s performance took place on the back of the bullish broadband telecom market, with growths in passive fiber optics and wired networking for data transmission. AMD, on the other hand, continued to benefit from the stay-at-home economy and other such market demands, in addition to its growing foothold in the server market. The company experienced increasing market shares and led its competitors with an impressive 92.9% YoY increase in revenue, the highest on the top 10 list. It should be pointed out that the extreme volatility of the cryptocurrency market, as well as the strict surveillance policies imposed on cryptocurrency trading by several countries, may introduce uncertainties in the future of gaming graphics card revenue for both Nvidia and AMD.

Regarding the performance of Taiwanese IC design companies, MediaTek’s smartphone business unit registered a remarkable 149% YoY growth in revenue mainly on account of high demand from Chinese smartphone brands, which were particularly aggressive in seizing Huawei’s former market share. Furthermore, as Qualcomm’s recent performance in the entry-level and mid-range smartphone markets remained relatively lackluster, MediaTek therefore aimed to fulfill demand from its smartphone clients as its chief goal on a macro level. As a result, MediaTek’s revenue for 1Q21 reached about $3.81 billion, an 88.4% YoY increase, placing the company in the fourth spot.

Novatek derived its performance from high component demand from manufacturers of IT products, TVs, and smartphones. In view of the current shortage of foundry capacity and rising prices of foundry services, Novatek has been able to maintain a stable supply of components via increased prices due to its longstanding, stable, and flexible strategic relationships with Taiwanese foundries (UMC, VIS, and TSMC), China-based Nexchip, and Korea-based Samsung LSI. Hence, Novatek leapfrogged both Marvell and Xilinx for the sixth place while increasing its revenue for 1Q21 by 59.4% YoY.

On the whole, the second wave of the COVID-19 pandemic in India, which has resulted in decreased production targets for Chinese smartphone brands, is not expected to drastically affect IC design companies’ component demand in 3Q21 because of the following factors: First, price hikes of foundry services have already been reflected in chip prices; secondly, market demand for devices remains high; and finally, Chinese smartphone brands still need to maintain a safe level component inventory, as they have yet to resolve the discrepancies among their various materials’ sufficiency levels.

Incidentally, although some expect that the recent spread of COVID-19 among KYEC employees may impact the procurement activities of IC designers that are part of KYEC’s clientele, TrendForce’s investigations of financial reports from various companies in April and May indicate that infections in KYEC facilities will unlikely result in major impacts on the revenues of IC designers in 2Q21.

For more information on reports and market data from TrendForce’s Department of Semiconductor Research, please click here, or email Ms. Latte Chung from the Sales Department at lattechung@trendforce.com

2021-03-25

Revenue of Top 10 IC Design (Fabless) Companies for 2020 Undergoes 26.4% Increase YoY Due to High Demand for Notebooks and Networking Products, Says TrendForce

The emergence of the COVID-19 pandemic in 1H20 seemed at first poised to devastate the IC design industry. However, as WFH and distance education became the norm, TrendForce finds that the demand for notebook computers and networking products also spiked in response, in turn driving manufacturers to massively ramp up their procurement activities for components. Fabless IC design companies that supply such components therefore benefitted greatly from manufacturers’ procurement demand, and the IC design industry underwent tremendous growth in 2020. In particular, the top three IC design companies (Qualcomm, Broadcom, and Nvidia) all posted YoY increases in their revenues, with Nvidia registering the most impressive growth, at a staggering 52.2% increase YoY, the highest among the top 10 companies.

According to TrendForce’s latest investigations, Qualcomm was able to overtake Broadcom for the leading position in the top 10 list primarily due to two reasons: First, the sudden demand surge for network devices; and second, Apple’s decision to once again adopt Qualcomm’s baseband processors. Incidentally, US sanctions against Huawei also prompted other smartphone brands to ramp up their production volumes in an attempt to seize additional market shares. Taken together, these factors collectively drove up Qualcomm’s revenue last year. Likewise, although the US-China trade war hampered Broadcom’s performances in 1H20, its smartphone RF front-end became a crucial part of Apple’s supply chain in 2H20. Even so, Broadcom fell to second place in the rankings, since its revenue growth was relatively minor. The Mellanox acquisition substantially bolstered the depth and breadth of Nvidia’s data center solutions, which generated nearly US$6.4 billion in revenue, a 121.2% increase YoY. Owing to its data center solutions and gaming graphics cards, which performed well in the market, Nvidia posted the highest YoY revenue growth among the top 10 companies, at 52.2% as previously mentioned.

The three Taiwanese companies delivered remarkable performances as well. In particular, MediaTek’s revenue underwent a 37.3% YoY increase in 2020, an overwhelming improvement over the 1% YoY increase in 2019. MediaTek’s growth last year took place due to several reasons, including the skyrocketing demand for notebooks and networking products, the success of MediaTek’s 5G smartphone processors, and improved specs as well as cost optimizations for MediaTek’s networking products. Novatek’s revenue grew by 30.1% YoY, as the US-China trade war and the stay-at-home economy brought about by the pandemic resulted in strong sales of its driver ICs and TV SoCs. Finally, Realtek benefitted from the high demand for its various offerings, most notably networking products and notebooks, although sales of its audio products and Bluetooth chips were also respectable. Realtek’s revenue increased by 34.1% YoY.

Capitalizing on the capacity limitations of Intel’s 10nm process, AMD made significant inroads in the notebook, desktop, and server CPU markets, resulting in a $9.7 billion revenue, a remarkable 45% increase YoY. Although Xilinx’s revenue declined by 5.6% YoY in the wake of the US-China trade war, recent QoQ changes in Xilinx’s revenue show that the company is well on its way to recovery going forward.

Although vaccines are being administered across the globe at the moment, the pandemic has yet to show any signs of slowdown in 1Q21. While device manufacturers remain active in procuring components, the shortage of foundry capacities is expected to persist throughout the year. IC design companies are likely to raise IC quotes given the need to ensure sufficient foundry capacities allocated to IC products, in turn propelling IC design revenue to new heights in 2021.

For more information on reports and market data from TrendForce’s Department of Semiconductor Research, please click here, or email Ms. Latte Chung from the Sales Department at lattechung@trendforce.com

2021-01-28

Automotive Market Set to Recover in 2021 with Yearly Sales of 84 Million Vehicles, While 12-inch Fab Capacities for Automotive Semiconductor Undergoes Most Severe Shortage, Says TrendForce

Not only did automotive market take a downward turn starting in 2018, but the severe impact of the COVID-19 pandemic in 2020 also led to noticeably insufficient procurement activities from major automotive module suppliers, according to TrendForce’s latest investigations. However, as the automotive market is currently set to make a recovery, TrendForce expects yearly vehicle sales to increase from 77 million units in 2020 to 84 million units in 2021.

At the same time, the rising popularity of autonomous, connected, and electric vehicles is likely to lead to a massive consumption of various semiconductor components. Even so, since most manufacturers in the automotive supply chain currently possess a relatively low inventory, due to their sluggish procurement activities last year in light of weak demand, the discrepancies in the inventory levels of various automotive components, along with the resultant manufacturing bottleneck, have substantially impaired automakers’ capacity utilization rates and, subsequently, vehicle shipments.

The recent shortage situation in the IC supply chain has gradually extended from consumer electronics and ICT products to the industrial and automotive markets. In the past, manufacturers in the automotive semiconductor industry were primarily based on IDM or fab-lite business models, such as NXP, Infineon, STMicroelectronics, Renesas, ON Semiconductor, Broadcom, TI, etc. As automotive ICs generally operate in wide temperature and high voltage circumstances, have relatively long product lifecycle, and place a heavy demand on reliability as well as longevity support, it is more difficult for the industry to alternatively transition its production lines and supply chains elsewhere.

Automotive semiconductor remains in shortage as production capacities remain fully loaded across the global foundry industry

Nevertheless, given the current shortage of production capacities across the foundry industry, wafer capacities allocated to automotive semiconductor components have been noticeably crowded out by other products. Some of these examples include automotive MCU and CIS manufactured in 12-inch fabs, as well as MEMS, Discrete, PMIC, and DDI products manufactured in 8-inch fabs. TrendForce indicates that automotive semiconductor products manufactured at the 28nm, 45nm, and 65nm nodes in 12-inch fabs are suffering the most severe shortage at the moment, while production capacities at 0.18µm and above nodes in 8-inch fabs have also been in long queue by other products.

As in-house IDM fabrications have relatively high CAPEX, R&D expense, and operating overhead, automotive IC vendors have in recent years outsourced some of their products to TSMC, GlobalFoundries, UMC, Samsung, VIS, Win Semiconductor and so on. In particular, TSMC specifically indicated during its 4Q20 earnings conference that wafer starts for automotive semiconductors reached rock bottom in 3Q20, while additional orders began arriving in 4Q20. As such, the company is currently considering allocating some of its production capacities from logic ICs to specialty foundry, in order to meet sudden demand from its long-term customer relationship.

For more information on reports and market data from TrendForce’s Department of Semiconductor Research, please click here, or email Ms. Latte Chung from the Sales Department at lattechung@trendforce.com

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