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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