Asia-Pacific semiconductor companies near one-third share of global expenditures in 2021, says update.

Despite political and national security concerns about U.S. domestic semiconductor production, American companies continue to account for more than half of the global chip industry’s total spending on research and development, according to the latest annual analysis of R&D expenditures by IC Insights.  About 56% of worldwide semiconductor industry R&D spending in 2021 was by companies headquartered in the Americas region—essentially all of them in the U.S. and a large chunk of that coming from Intel (19%, or $15.2 billion last year), says IC Insights’ analysis of research and development trends published in its most recent quarterly update of the 2022 McClean Report service.

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2011-2021 CAGR for fabless company IC sales (10%) was double that of the IDM IC suppliers.

While there is a relatively close relationship between the annual market growth of the fabless IC suppliers and foundries, the sales growth rates of fabless IC companies versus IDM (integrated device manufacturers) IC suppliers have usually 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 time on record that IDM IC sales growth outpaced fabless IC company sales growth was in 2010 when IDM IC sales grew 35% and fabless IC company sales grew 29%.

Figure 1

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Early warning signs of a turning point in the semiconductor industry cycle becoming more evident.

Canary in a Coal Mine: Something that acts as an indicator and early warning of possible adverse conditions or danger.

On June 30, 2022, Micron, the third largest memory supplier in the world, reported its fiscal 3Q results that ended in May.  These results were very strong, with the company posting sales of $8.6 billion, up 11% from the previous quarter and 19% higher than one-year earlier.  However, the guidance for its fiscal 4Q sales ending in August was the epitome of a “canary in a coal mine” moment.
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New ranking shows long-time leader Intel sliding closer to half the total sales in microprocessors.

Despite economic troubles brewing this year, total microprocessor sales are expected to maintain double-digit percentage growth in 2022, rising nearly 12% to a record-high $114.8 billion, thanks to higher average selling prices (ASPs), according to IC Insights’ updated second-quarter semiconductor forecast.  Total MPU sales grew 13% in 2021 and climbed 16% in 2020, when the Covid-19 virus health crisis wrecked the global economy but also drove up microprocessor demand because of the need for more personal computers, smartphones, and Internet connections in the deadly pandemic.

IC Insights’ 2Q Update to the 2022 McClean Report service shows total MPU shipments rising just 3% this year, which will lift unit volume to an all-time high of nearly 2.5 million processors following increases of 6% in 2021 and 5% in 2020.  MPU revenues in 2022 are expected to get a boost from an 8% increase in ASPs after average prices grew 7% last year and 10% in 2020, says IC Insights’ 2Q Update.
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