Fabless Suppliers Held a Record 33% of the 2020 IC Market

Fabless IC suppliers registered a strong 24% surge in sales last year as compared to only an 8% increase by the IDMs.

IC Insights’ April Update to the 2021 McClean Report describes how the sales growth rates of fabless IC companies versus IDM (integrated device manufacturers) IC suppliers have historically been very different (Figure 1). Typically, the sales growth rate registered by the fabless IC suppliers is better than that displayed by the IDMs. In fact, the first year on record that IDM IC sales growth outpaced fabless IC company sales growth was 2010 when IDM IC sales grew 35% and fabless IC company sales grew 29%.

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Propelled by 50% share of IDM sales and 64% share of fabless sales, U.S. companies captured 55% of the total worldwide IC market in 2020.

Regional marketshares of IDMs (companies operating wafer fabs), fabless companies, and total IC sales were led by U.S. headquartered companies in 2020, according to the March Update to The McClean Report 2021.

Figure 1 shows U.S. companies held 55% of the total worldwide IC market in 2020 followed by the South Korean companies with a 21% share.  Taiwanese companies, on the strength of their fabless company IC sales, held 7% of total IC sales, one point greater than the European and Japanese companies. As shown, Chinese companies held only 5% of the global IC market in 2020.

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A 13% increase is expected to lift total semiconductor shipments to a new record high.

Total semiconductor unit shipments, which include integrated circuits as well as optoelectronics, sensor/actuator, and discrete (O-S-D) devices, are forecast to rise 13% in 2021, to 1,135.3 billion (1.1353 trillion) units to set a new all-time annual record, based on data presented in the 2021 edition of IC Insights’ McClean Report—A Complete Analysis and Forecast of the Integrated Circuit Industry, which was released in January 2021.  It would mark the third time that semiconductor units have surpassed one trillion units in a calendar year—the first time being in 2018 (Figure 1).

The 13% increase to 1,135.3 billion semiconductor units follows a 3% increase in 2020 as the Covid-19 pandemic was wreaking havoc across many segments of the economy.  From 1978, when 32.6 billion units were shipped, through 2021, the compound annual growth rate (CAGR) for semiconductor units is forecast to be 8.6%—an impressive 43-year annual growth rate even though the growth rate has waned for many key semiconductor applications such as PCs and cellphones.  The strong CAGR also demonstrates that new market drivers continue to emerge that fuel demand for more semiconductors.

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