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June Swoon—IC Sales Turn Negative as Economy Weighs on Market

Friday, August 5th, 2022

Never-before seen decline in June IC market driven by steep drop in memory pricing.

The IC market recorded its first-ever June sequential sales decline this year, based on data from WEMA, SIA, and WSTS dating back to 1976. Typically, high single-digit or double-digit sales gains have been the pattern for June IC sales. Even in its previously weakest year (1985), June IC sales increased 1%.  Never, until this year, have June IC sales declined.

This extraordinary result was startling for at least two reasons.  First, June is a quarter-ending five week month and that alone has historically been enough to generate a sales uptick compared to the four-week month of May. Second, June is normally one of the strongest months of the year for IC sales since OEMs are buying chips to build into their new systems in time for back-to-school and end-of-year holiday sales.

Americas’ Chip Suppliers Continue to Dominate R&D Spending

Friday, July 22nd, 2022

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.


Fabless Suppliers Hold Record 34.8% Share of Global IC Sales

Tuesday, July 12th, 2022

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


Are Micron and the Taiwanese Semi Suppliers the Canaries in the Coal Mine?

Tuesday, July 12th, 2022

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.

Top Five MPU Suppliers Expand Share of Sales to 86% in 2021

Friday, July 1st, 2022

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.

The Five Biggest MCU Suppliers Accounted for 82% of 2021 Sales

Wednesday, June 15th, 2022

New ranking shows some revenue gaps expanding between the largest microcontroller manufacturers.

Single-chip microcontrollers for embedded control and computing functions are ubiquitous and continue to be designed into more systems.  Much of the new growth in MCUs is driven by embedded automation and the spread of sensors.  The pervasiveness of MCUs was a key factor in suppliers being unable to keep up with the strong 2021 rebound from the 2020 global recession caused by the start of the Covid-19 virus pandemic.

After falling 7% in 2019 because of a weak global economy and then dropping 2% in 2020 due to the Covid-virus crisis, MCU sales rebounded with a 27% increase in 2021 to a record-high $20.2 billion.  The 2021 surge was the highest percentage growth in MCUs since 2000. The average selling price (ASP) for MCUs climbed 12% in 2021—the highest annual increase since the mid-1990s.  Production-constrained MCU shipments grew just 13% in 2021 to 31.2 billion units.

Semiconductor Growth Still Seen at 11% Despite 2022 Headwinds

Thursday, June 2nd, 2022

New quarterly update shows higher gains in microprocessors and power discretes this year, but lowers sales increases in optoelectronics while the global economy faces greater risks.

Despite rampant inflation, soaring energy costs, ongoing glitches in supply chains, recent Covid-19 virus lockdowns in China, and Russia’s war with Ukraine, IC Insights continues to anticipate an 11% increase in total semiconductor sales this year—the same growth rate that was forecast in January.  However, what’s different in IC Insights’ new updated forecast is how the semiconductor market achieves the low double-digit percentage growth and reaches record-high sales of $680.7 billion in 2022.

Top Three Suppliers Held 94% of 2021 DRAM Marketshare

Tuesday, May 24th, 2022

Samsung, SK Hynix accounted for 71% of DRAM sales.  Major supplier base now reduced to six.

IC Insights’ 112-page May 2Q Update to The McClean Report 2022 is now available for subscribers to download. It includes a current outlook for the 2022 global economy, detailed market, unit shipment, and ASP forecasts for IC and O-S-D products through 2026, 2021 semiconductor supplier rankings by product type, the 1Q22 top-25 semiconductor supplier ranking, an analysis of the IC market by region with additional focus on the China market, semiconductor R&D spending trends, and an overview of various government-sponsored investment programs targeting the semiconductor industry.

Over the past 30 years, the DRAM market has been characterized by periods of spectacular growth and years of devastating crashes (Figure 1).  Most recently, the DRAM market fell 37% in 2019 but soared 42% in 2021. No matter the cause—and there are many—boom-bust cycles have lowered the number of major DRAM suppliers from 20 in the mid-1990s to just six today.  The three largest suppliers—Samsung, SK Hynix, and Micron—collectively held 94% DRAM marketshare in 2021 (Figure 2).  South Korea-based Samsung and SK Hynix accounted for 71.3% of the world’s DRAM sales last year.


Industry R&D Spending To Rise 9% After Hitting Record in 2021

Tuesday, May 17th, 2022

New update shows Intel continues to lead research and development ranking, the top 10 raised spending 18% last year, and 21 companies invested $1 billion or more on R&D in 2021.

Research and development spending by semiconductor companies worldwide is forecast to grow 9% in 2022 to $80.5 billion after climbing by an above average 13% in 2021 to a record-high $71.4 billion, according to IC Insights’ soon-to-be-released 2Q Update to The McClean Report 2022.  Total R&D spending by semiconductor companies is expected to rise by a compound annual growth rate (CAGR) of 5.5% between 2022 and 2026 to $108.6 billion.

When the world was hit by the Covid-19 virus health crisis in 2020, wary semiconductor suppliers kept a lid on R&D spending increases even though the chip industry’s revenue grew by a surprising 11% in the year despite shutdowns of businesses and other emergency measures to slow the deadly pandemic. Semiconductor R&D spending as a percentage of worldwide industry sales slipped to a ratio of 13.1% in 2021 compared to 14.5% in 2020 and 15.1% in 2019, when research and development expenditures declined 1% and total chip market revenue fell 12%.  Figure 1 plots semiconductor R&D spending levels and the industry’s R&D/sales ratios over the past four decades and IC Insights’ forecast through 2026.


Top 10 Companies Hold 57% of Global Semi Marketshare

Tuesday, April 26th, 2022

In 2021, five of the top 10 semiconductor companies were fabless suppliers.  In 2008, there was one fabless company in the ranking; in 2000, there were none.

IC Insights’ 2Q Update to The McClean Report 2022 will be released in May. It presents an analysis of the marketshare of the major semiconductor suppliers excluding the pure-play foundries (Figure 1).  While there is a small amount of double-counting effect due to the IDM foundry revenue included in the figures, it is not large enough to significantly alter the trend discussed below.


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