The global semiconductor components shortage has been in the news since the start of the COVID-19 pandemic. Trade tensions between the US and China further upset the normal supply situation and the automotive sector was among the high-profile casualties. Chip manufacturers addressed the supply-demand issue by increasing capacity.
Then, there is the Russia-Ukraine conflict which has added further uncertainties with respect to some raw materials that are required for semiconductor manufacturing. The geopolitical issues are also creating macroeconomic headwinds, leading to a drop in overall demand. Will an increase in capacity lead to an oversupply situation?
In the latest episode of ‘The Counterpoint Podcast’, host Peter Richardson is joined by Research Director Dale Gai, and Senior Analyst Ashwath Rao to talk about the global semiconductor manufacturing and foundry market update. In this discussion, we talk about the foundry inventory correction cycle, the role of wafer fab equipment makers in the supply chain, the future of process node and packaging technologies, and much more.
Mobile and wearables, IT and industrial segments currently contribute around 80% of the semiconductor revenues in India.
‘Make in India’ and Production Linked Incentive schemes will boost local sourcing of semi-components in the coming years.
Further policy reforms and building of a semiconductor ecosystem will reduce reliance on imports going forward.
New Delhi, Seoul, San Diego, Buenos Aires, London, Hong Kong, Beijing – August 16, 2022
India’s semiconductor component market will see its cumulative revenues climb to $300 billion during 2021-2026, according to the ‘India Semiconductor Market Report, 2019-2026’, a joint research by the India Electronics & Semiconductor Association (IESA) and Counterpoint Research. IESA is the premier industry body representing the ESDM and intelligent electronics industry in India. It acts as a trusted knowledge partner to the central and state governments, helping devise policies and incentives for the industry to attract investments into India. The comprehensive research on India’s semiconductor market focuses on the bottom-up modelling unit as well as revenue demand for semiconductor components covering the entire Bill of Materials (BoM) of multiple end-device and equipment categories across seven major sectors in India – Mobile and Wearables, Information Technology, Automotive, Industrial, Telecom, Aerospace and Defence, and Consumer Electronics – from domestic consumption as well as export perspective. The report provides detailed recommendations, potential policies and a framework for building a robust domestic semiconductor ecosystem to boost local production and sourcing.
Source: India Semiconductor Market Report
IESA CEO and PresidentKrishna Moorthy said, “Before the end of this decade, there will be nothing that will not be touched by electronics and the ubiquitous ‘chip’. Be it fighting carbon emissions, renewable energy, food safety, or healthcare, the semiconductorchip will be all-pervasive. Imagine this – all children all over India get educated in virtual classrooms by the country’s best teachers. The chip makes it possible. Again, imagine everyone in the country gets quality healthcare and diagnostics done remotely. Medicines are delivered by drones at your doorstep, even in the farthest villages of India. The chip will make it possible, and we will see this in front of our eyes very soon. Let us make India the semiconductor nation.”
India is poised to be the second largest market in the world from the perspective of scale and growing demand for semiconductor components across several industries and applications. This demand is being pushed by the increasing pace of digital transformation among the country’s consumers, enterprises and public sector through the adoption of new technologies, from advanced connectivity to content consumption to the cloud. These cover smartphones, PCs, wearables, cloud data centers, Industry 4.0 applications, IoT, smart mobility, and advanced telecom and public utility infrastructure.
Mobile and wearables, IT and industrial sectors alone contributed to almost 80% of the semiconductor revenues in India in 2021. Commenting on the mobile and wearables industry, Research Director at Counterpoint ResearchTarun Pathak said, “The mobile and wearables sector was the biggest contributor to India’s semiconductor industry in 2021. Mobile devices have become a primary tool for internet connectivity given that broadband and laptop/PC penetration remains low. In the last five years, the ‘consumer digital transformation’ has accelerated with the availability of cheap mobile internet, and mobile devices have connected a big part of the Indian population. Also, the gradual shift from feature phones to smartphones has been generating increased proportions of advanced logic processors, memory, integrated controllers, sensors and other components. This will continue to drive the value of the semiconductor content in smartphones, which is still an under-penetrated segment in India, aided by the rise of wearables such as smartwatch and TWS.”
Commenting on the potential opportunity in the mid-to-long term, CounterpointResearch Vice President Neil Shah said, “The next big boom for semiconductor components will come from across sectors. However, the telecom sector with the advent of 5G and fiber network rollout will be a key catalyst in boosting the semiconductor components consumption. This consumption will not only come from the advanced semiconductor-heavy 5G and FTTH network infrastructure equipment, which will contribute to more than 14% of the total semiconductor consumption in 2026, but also from the highly capable AI-driven 5G endpoints, from smartphones, tablets, PCs, connected cars, industrial robotics to private networks. Also, ongoing efforts to embrace cleaner and greener vehicles (electric vehicles) will provide an impetus for the automobile industry to adopt advanced technologies, which in turn will boost the demand for semiconductor components in India. Consumer electronics, industrial, and mobile and wearables will be the other key industries for the growth of the semiconductor market in India. Further, this semiconductor demand will not only be driven by domestic consumption but also by the growing share of exports.”
In 2021, India’s end equipment market stood at $119 billion in terms of revenue. It is expected to grow at a CAGR of 19% from 2021 to 2026. The Electronic System Design and Manufacturing (ESDM) sector in India will play a major role in the country’s overall growth, from sourcing components to design manufacturing. The semiconductor industry in India is on a path to immense growth over the next few years to help India’s economy reach the next stage for both domestic consumption and exports. While the country is becoming one of the largest consumers of electronic and semiconductor components, most components are imported, offering limited economic opportunities for the country. Currently, only 9% of this semiconductor requirement is met locally.
The demand for semiconductors is growing astronomically worldwide. However, multiple factors, including the pandemic and global geopolitical events, have heavily impacted the manufacturing of the components. This research is aimed at analyzing the market situation, manufacturing supply chain, and prospects for India as a premier manufacturing destination not only for finished goods but also for semiconductor components. While the local production is currently low, India has immense potential to become a leading semiconductor component supplier in the coming years, provided the talent pool and resources are utilized correctly. The government’s initiatives, from ‘Make in India’ to Production Linked Incentive (PLI), will help accelerate this journey but will need some additional reforms to increase local manufacturing and sourcing of semiconductor components. If this is done, the semiconductor market can be a major contributor to economic growth, and India’s push to become a $5-trillion economy.
IESA Vice PresidentSunil G Acharya said, “Semiconductors will be inside everything intelligent. India is becoming a tech-centered growth story with advancing technologies and innovation being integral to democratizing access. The semiconductor study will play a major role in India’s growth. A large young population combined with an increased focus on digitalization, advancing skill levels, growing manufacturing and foreign investment traction will take India’s semiconductor industry to the next level in the coming years.”
Commenting on the current stage of local manufacturing, Research Analyst at Counterpoint Research Shivani Parashar said, “To achieve India’s semiconductor vision, a robust and indigenous technology ecosystem will be required to build on the existing policy foundation through PLI-like schemes. Renewed focus is needed for incentivizing the country’s design ecosystem in a manner that helps create a stronger foundation for design-led manufacturing and allied sectors, be it for local consumption or exports. This strategy will transform the landscape in the coming years to drive local sourcing trends. The share of local sourcing is expected to grow to over 17% by 2026. This translates into a six-fold rise in potential locally-sourced semiconductor revenues.”
IESA Vice President (Public Policy, Government and Corporate Relations) Anurag Awasthi said, “From safety razors to space shuttles, everything will be powered by the chip. Let us ensure our chips are not down in the world of tomorrow! Keeping this as an aim, MeitY is working further towards making India one of the next technology powerhouses, especially in a pandemic-struck world where there has been a realization of the need for more flexible and diverse supply chain ecosystems. The government is keen to leverage India’s existing strengths in mobile manufacturing, software and start-up hubs for other critical industries in the ESDM sector.”
Research Analyst at Counterpoint Research Priya Joseph added, “Government policies including PLI, New Electronics Policy, 2019, Electronics Manufacturing Clusters, and Scheme for Promotion of manufacturing of Electronic Components and Semiconductors (SPECS) are all being equipped to boost domestic design, manufacturing and assembly. To help drive more initiatives under the themes of Make in India and Digital India, the government, in its last budget, pushed the total allocation to $936.2 million. This step not only aims to incentivize India-based manufacturing but also catalyze investments in the sector to support job creation, ease of doing business, import reduction and export promotion.”
To access the full report, please contact IESA at the coordinates below.
Counterpoint Technology Market Research is a global research firm specializing in products in the TMT (technology, media, and telecom) industry. It services major technology and financial firms with a mix of monthly reports, customized projects, and detailed analyses of the mobile and technology markets. Its key analysts are seasoned experts in the high-tech industry.
Taipei, London, Hong Kong, Boston, Toronto, New Delhi, Beijing, Seoul – July 27, 2022
Global PC shipments fell 11.1% YoY in Q2 2022 to reach 71.2 million units and record the largest YoY decline since Q2 2013, according to Counterpoint data. The Q2 2022 decline was largely due to lockdowns in China’s Shanghai and Kunshan, which hit the PC supply chain. However, as the OEMs’ inventory continues to accumulate amid lackluster consumer demand globally, we believe supply issues will likely get resolved in the second half of this year.
Diminishing YoY PC Shipment Growth Since Q1 2021
Source: Counterpoint Research
The macroeconomic turbulence continues to impact worldwide consumption momentum. Regional conflicts as well as global inflation have resulted in a downward sloping demand and consumer spending. Enterprises too are putting off their new purchases and device upgrades, though the orders from the commercial segment have remained more solid compared to the consumer segment. By region, the US and EU experienced relatively huge double-digit YoY declines in their Q2 2022 shipments, mainly dragged by Chromebook demand correction and soft consumer demand, as these regions had started seeing shipment growth ahead of other regions last year.
On the other hand, lockdowns in China during the quarter hit hard the laptop supply chain, as major laptop ODMs, including Quanta, Compal and Wistron, suffered manufacturing disruptions. The most harmful impacts were in April and May when we saw approximately 40% and 20% YoY declines respectively for key ODMs. Production lines resumed normal operations in the second half of May and were trying to clear order backlogs.
Major Laptop ODMs’ Inventory Levels (in $ mn)
Source: Counterpoint Research
Even though the top three brands showed a YoY decline in Q2 shipments, they all managed to keep their rankings unchanged. Lenovo maintained its leadership in the global PC market with a 24.4% share in Q2 2022. The brand’s total shipments fell 12.7% YoY to 17.4 million units mainly due to weak consumer demand, partly offset by moderate commercial orders.
HP suffered the most among the top brands in Q2 2022, reporting a 27% YoY decline in shipments from a high base last year. The sharp decline was mainly due to soft momentum for consumer products and Chromebooks. On the other hand, Dell had the smallest adjustment to its YoY shipment performance, thanks to a commercial/premium-focused product strategy.
Acer saw a 14.8% YoY shipment decline off a relatively high base in Q2 2021. Despite Chromebook weakness continuing to cap Acer’s growth momentum, its market exposure in entry- to mainstream-level laptops helped the brand take fourth place in global PC shipments in Q2 2022.
Apple reported a sharp decline of 20% YoY in its Q2 shipments largely due to supply chain disruption at Quanta’s manufacturing lines in China. The consumers too were waiting for a new MacBook series equipped with M2 chips. As a result, the company lost its fourth place in the global PC rankings for Q2 2022.
Asus’ Q2 shipments were down 7.7% YoY thanks to its commercial segment focus in recent quarters combined with consumer spending weakness entering 2022. The brand’s total shipments of 4.7 million made it share the fifth position with Apple in Q2 2022.
Global PC Shipments by Vendor, Q2 2022
More shipment adjustments seen
We had cut our 2022 shipment forecast in Q1 2022 to reflect the beginning of a weakening PC demand. But with persistent inflation pressure and enterprise spending saturating, we expect order adjustments to continue even as the average selling price plateaus on easing supply constraints. Therefore, we are revising our forecast for the 2022 PC shipments to a 9% YoY decline, with potential bright spots of new M2 MacBooks and desktop demand rebounding after the post-COVID-19 reopening of offices.
Tesla sold more than 254,000 vehicles in Q2 2022, an increase of 27% YoY, which was below general expectations.
This was the first time since the COVID-19-hit 2020 that the automaker experienced a sequential decline in sales.
After achieving phenomenal growth in Q1 2022, Tesla’s global sales during Q2 2022 grew by just 27% YoY to over 254,000 units, falling short of expectations. In QoQ terms, the sales fell 18%. Business during Q2 2022 was affected by COIVD-19-related shutdowns in China. Production units in and around Shanghai were closed temporarily due to strict lockdown measures. As a result, Tesla sold just 89,000 cars across China during Q2 2022. Cumulative sales in China during April and May fell by more than 66% YoY. The situation improved only after the production returned to full capacity in June.
It was expected that the Berlin Gigafactory would boost Tesla’s sales in Europe after becoming operational in March 2022. But the production was lower than expected. A few rumored reasons for the low production are litigation with the German government and a shortage of human resources. The Berlin factory is currently focusing on the production and deliveries of the Model Y across Europe.
Tesla bets on in-house battery cell manufacturing
Tesla delivered its first batch of cars equipped with the in-house 4680 battery cells and structural battery packs during this quarter. These cells use a little amount of lithium. With lithium prices soaring worldwide, 4680 cells will help lower the vehicle manufacturing cost. The cells will power the Model Ys coming out of the Berlin Gigafactory. However, Tesla will shut the Berlin Gigafactory for a couple of weeks during autumn to upgrade the production system of 4680 cells.
Other businesses see 33% YoY growth
Although Tesla’s vehicle sales in Q2 2022 failed to meet expectations, its other businesses like energy deployment and storage, charging and other services grew more than its vehicle segment. Energy deployment, energy storage, charging and other services grew by 33% YoY. Tesla deployed 106 MW of solar panels and 1.13 GWh of energy storage during Q2 2022. It installed 247 new superchargers worldwide, bringing its global supercharger number to 3,971 units with more than 36,000 connectors.
Tesla converts 75% of its Bitcoins to fiat currency
During Q2 2022, Tesla also converted 75% of its Bitcoins to fiat currency. This was done to have a better cash position against the backdrop of COIVD-19-related uncertainties. This conversion reduced Tesla’s digital assets to $218 million and added $936 million in cash to Tesla’s balance sheet.
Source: Tesla Q2 2022 Financials and Counterpoint Analysis
Q2 2022 Financial Results
During Q2 2022, Tesla sold more than 254,000 vehicles at 27% YoY growth. The Model 3 and Model Y comprised more than 93% of these sales.
Revenue from vehicle sales stood at $14.6 billion. Total revenue grew by almost 42% YoY, with the COVID-19 impact on China reducing the QoQ number by about 10%. Revenue generated from automotive credit also declined slightly compared to Q2 2021.
The company’s other services, like energy storage, charging and insurance, contributed to 14% of its total revenue. Revenue from insurance and vehicle services saw a 54.2% YoY growth, while the energy storage and charging segment grew by just 8% YoY. The energy storage business was expected to perform better but was restricted due to semiconductor-related supply issues.
Tesla’s gross profit during Q2 2022 reached $4.2 billion and stood at 25%. Though the shutdown in China adversely affected the business, increase in US deliveries along with the higher average vehicle price helped Tesla earn 47% more profit YoY.
R&D costs grew 16% YoY during Q2 2022. Tesla is trying to achieve complete autonomy by 2024 by perfecting Full-Self Driving (FSD) software. But the resignation of Andrej Karpathy, the director of artificial intelligence and autopilot system at Tesla, in mid-July is likely to stall the progress of this project, which is expected to get delayed by a year.
Source: Tesla Q2 2022 Financials and Counterpoint Analysis
Market Outlook
Despite experiencing a dip during the second quarter of 2022, Tesla’s future outlook seems strong and promising with strong fundamentals. Tesla has secured the supply of LFP batteries for its Shanghai Gigafactory by signing a deal with BYD. Transitioning to LFP batteries and 4680 battery cells will help Tesla reduce vehicle manufacturing costs. Moreover, Tesla expects the Berlin Gigafactory production capacity to cross 100,000 units by the end of 2022. With all these developments, Tesla is expected to cross more than 1.2 million units of vehicle deliveries by the end of 2022.
Only second time sales dip below 100mn units in almost 10 years
New Delhi, Seoul, Boston, Denver, Taipei, Beijing, London, Toronto, Hong Kong – June 30, 2022
The Global Smartphone Market sales declined 4% Month on Month (MoM) and 10% Year on Year (YoY) in May 2022 to 96 million units, according to Counterpoint Research’sMarket Pulse Service. This was the second consecutive month of MoM decline and the 11th consecutive month of YoY sales decline.
Even after a “V” shaped recovery following the first COVID-19 wave in 2020, the smartphone market has still not reached the pre-pandemic levels. In 2021, the smartphone market was impacted by supply constraints and persistent COVID waves. In 2022, the component shortages, although not fully resolved, have been stabilizing. However, the smartphone market is now hit by a demand slump due to multiple factors including inflation, China’s slowdown, and the Ukraine crisis.
Global Smartphone Sales (sell-through), May 2022
Source: Counterpoint Research Monthly Market Pulse
Commenting on inflationary pressures, Research Director Tarun Pathak said, “The demand for a smartphone especially in the advanced economies is driven by replacement, which makes it a discretionary purchase. And inflationary pressures are leading to pessimistic consumer sentiment around the globe with people postponing non-essential purchases, including smartphones. The strengthening US dollar is also hurting emerging economies. A segment of consumers is likely to wait for seasonal promotions before purchasing to offset some of the cost pressures. “
Commenting on the China market, and the Ukraine crisis, Senior Analyst Varun Mishra said, “China’s lockdowns and prolonged economic slowdown has been hurting domestic demand as well as undermining the global supply chain. The smartphone market in China recovered slightly month on month in May as lockdowns eased, however, it remained 17% below May 2021. There may need to be a new baseline market size defined for China’s smartphone market. Added to this is the uncertainty created by the Russia-Ukraine crisis, which is hurting demand in Eastern Europe. None of the OEMs seems to be spared from the negative impact on demand caused by a mix of these factors.”
The low demand is also leading to inventory build-ups leading to declining shipments and order cuts from smartphone manufacturers. Q2 is likely to be the most heavily impacted this year in terms of sales before the situation improves in H2 2022.
According to the Counterpoint macro index, we expect the negativity to continue throughout the summer, but improve gradually during H2, mainly due to a more normalized situation in China, continued improvement in the supply-demand balance in tech supply chains, and a better macroeconomic landscape if inflation peaks in the mid-year period before heading back down. June also marks the beginning of a period of promotions in several regions, like 618 in China, back-to-school in August, Diwali in India followed by Christmas and New Year. It will also mark notable launches like the new Samsung Galaxy Fold series and the iPhone 14 series, which can help ignite some demand.
Please reach out to press@counterpointresearch.com for press comments and enquiries.
Counterpoint Technology Market Research is a global research firm specializing in products in the TMT (technology, media and telecom) industry. It services major technology and financial firms with a mix of monthly reports, customized projects and detailed analyses of the mobile and technology markets. Its key analysts are seasoned experts in the high-tech industry.
AMD reported its best-ever quarterly revenue at $5.9 billion in Q1 2022, a 71% YoY increase driven by the cloud computing, automotive, gaming and data center segments. This revenue includes six weeks of performance of Xilinx, whose acquisition was successfully completed by the company during the quarter. Xilinx is an FPGA and networking compute solution provider. Excluding Xilinx, AMD’s Q1 2022 revenue was $5.3 billion, a 54.7% YoY increase. We give below some of the key takeaways from AMD’s Q1 2022 earnings statement:
The gross margin was at 48%, up 190 bps YoY.
Revenue for the Computing and Graphics segment was $2.8 billion, up 33% YoY.
Revenue for the Enterprise, Embedded and Semi-custom segment was $2.5 billion, up 88% YoY.
The company intends to acquire Pensando, a distributed services platform provider.
Wafer shortage for 16nm and below will remain constrained till H2 2022.
All values in USD Million
Client Compute revenues
The company launched seven new CPUs for desktop processors and first desktop processors with 3D chiplet architecture. In the notebook segment, the company extended the mobile processors to cater to customers across the spectrum, including gaming and creators, with features like better battery life and compute synergies.
Desktop GPUs grew significantly owing to mobile GPU launches, but data center GPUs, including the new launch of Instinct MI210 accelerators, remained flat.
The revenues across the client compute PC market will see a correction in the next quarter, driven by inflationary pressures and dampened demand.
The company will focus more on premium, high-margin segments as the PC market softens in the next quarter.
GPU demand will also remain muted due to lowered prices and improved supply in the market. Weakening crypto markets will also contribute to the growth pace of the product portfolio.
Enterprise, Embedded and Semi-custom segment
Gaming console, automotive and data center units were the growth drivers for this segment, including a new launch by Valve in the gaming console space. The company also launched its first processors for the cloud and HPC markets, featuring 3D-stacked chiplets architecture.
The Data Center Compute segment will continue to drive growth as hyperscalars continue to expand cloud infrastructure and enterprises upgrade their IT infrastructure.
In networking and communication, due to enhanced synergies with the Xilinx portfolio, the company’s FPGA-as-a-Service and Smart NICs will help in penetration and diversification of the market to mainly telecom and fintech players.
The company will focus more on AI workload-based GPUs and expanding its software stack.
The past two years have brought out the importance of semiconductors in driving economies like never before. Whether it is the demand shock created by COVID-19 or the US-China tech war, the need to diversify the semiconductor supply chain has dawned on governments the world over. The issue is also being eagerly discussed at global forums, the recent meeting of the Quadrilateral Security Dialogue (or Quad) being the latest example. Quad members US, India, Japan and Australia have decided to work together to secure the semiconductor supply chain.
Another factor pushing such efforts is China’s attempts to set global standards for emerging technologies like 5G internet, IoT and AI through its “China Standards 2035” plan, which seeks to build on the “Made in China 2025” plan. Clearly, the ongoing global chips shortage has only accentuated the concerns about over-dependence on a few markets for critical technologies.
Many economies are currently at work to achieve self-dependence in meeting their chip requirements. But it takes years to build semiconductor fabrication facilities and much expenditure to maintain and upgrade them. Therefore, the idea of becoming “self-sufficient” or “independent” is not a viable option. Still, many economies like the US, EU and East Asian countries are calibrating their measures to indigenize as well as diversify the semiconductor supply chain to have a more resilient supply network. We list below a few such efforts:
Taiwan
As the world’s largest contract chip manufacturer, TSMC has hugely benefited from the global chip shortage. To maintain this leadership and diversify its production locations, it plans $45 billion worth of capital investment in Taiwan and beyond.
US
A $52-billion plan includes incentivizing the production of “mature node” semiconductors used by the automobile, medical device, agricultural machinery and defense equipment industries. The legislation to this effect, which is broadly supported by the chip industry, would also facilitate funding for new chip fab units. This would help the companies that build them and fabless companies such as AMD, Nvidia and Qualcomm, which rely on contractors to manufacture their products. US’ share in chip manufacturing has dropped to around 11% from almost 40% in the last 30 years. With this move, the US can potentially restore its position in the global supply chain.
Europe
With the onset of the European CHIPS Act, Europe aims to double its current market share of semiconductor production to 20% by 2030 with an allocation of $49 billion. The plan includes building a new framework to ensure the security of supply along with a dedicated ‘Chips Fund’ to focus on exports. The said plan will also have a provision to ‘halt exports’ as a last resort in case of emergencies and crises. The EU is also mobilizing more than €43 billion in public and private funding to support broader policy goals around digitalization, green transition and R&D.
China
Under the “Made in China 2025” plan, China aims to produce 70% of the semiconductors it uses by 2025. The government has also signed massive deals with SMIC in this regard. The said project will also have a minority holding of the government along with funding support from the respective local government. Most recently, the country also introduced many industrial policy measures to help boost its domestic semiconductor industry through tax relief to chip manufacturers. For example, a manufacturer that has been in operation for more than 15 years and makes 28 nm or more advanced chips will be exempted from corporate income tax for up to 10 years.
India
The most recent participant in the chip world, India has established its presence by introducing a semiconductor policy under the Production Linked Incentive scheme. With an outlay of almost $10 billion for six years, the scheme aims to incentivize all major stages of semiconductor production – Semi/Display Fabs, Semi ATMP units and Designing. This scheme is by far the most comprehensive package designed for the sector by the government. With a special provision on designing, the Indian government has worked well to leverage this advantage of the country compared to the rest of the world. One of the best parts has been the promise of nurturing (under DLI) some 100 domestic semiconductor design companies, offering hope to the many design-linked concerns of the ecosystem.
Semiconductor Policy Plan For Different Regions
Geopolitics
The geopolitical dynamics will also shape the future of the semiconductor market, an angle that has come under much scrutiny during the last couple of years. Various ‘alliances’ and ‘councils’ are already at work preparing plans to diversify the supply chain and gain “self-sufficiency”. On the one hand, we have the Quad alliance taking shape in the Indo-Pacific region, while on the other hand, we have the newly formed EU-US tech alliance called the Trade and Technology Council, where France is expected to pivot the semiconductor negotiations. Moreover, the European Alliance for Processors and Semiconductors is bringing many EU member states together for business, research and technology under the semiconductor ambit.
A key differentiator among all these efforts would be how well each economy utilizes the combination of money, time, innovation and know-how, using both international and homegrown talent. Besides, they will have to position themselves in a way that minimizes risks and reshoring impact when it comes to trade inflows and outflows. This is especially true with respect to the US, EU and Southeast Asia considering other changing factors like labor cost, economic tensions (Ukraine-Russia war) and even the not-so-gone COVID-19, which have the ability to impact the demand-supply harmony of this ecosystem.
*Source for the table: Government documents and notifications
London, Hong Kong, Boston, Toronto, New Delhi, Beijing, Taipei, Seoul – January 28, 2022
Semiconductor industry went through significant structural changes in 2021 after entity lists were announced by both China and the US. The overall 2021 semiconductor revenue rankings also varied from the previous year. Samsung took the first position from Intel thanks to its solid growth momentum in both logic IC and memory segments. Memory vendors continued to lead the industry with SK Hynix and Micron taking the third and fourth positions, followed by IC design vendors, including Qualcomm and NVIDIA.
During 2021, many top-tier semiconductor companies reiterated material changes happening in the industry, such as semi content growth, higher inventory level and longer chip lead time due to global component shortages as well as logistical issues. The year saw 19% YoY revenue growth with the largest contribution coming from the memory and IC design sectors.
Semiconductor Industry Top Players Revenues & Rankings – 2021
Samsung took the lead in 2021 with a strong DRAM and NAND flash market performance at the expense of Intel’s relatively flattish results. Major smartphone SoC and GPU vendors also enjoyed strong growth in the year with over 50% YoY revenue increase. In addition, we saw 27% YoY revenue growth among the top 15 vendors, outperforming global semiconductor revenue growth and implying another year of centralized semiconductor industry.
In general, we believe supply constraints will likely persist before H2 2022, though our checks suggest some amount of component shortage easing. Looking ahead, foundries are adding new capacities in 2023 and most of them hold optimistic views on their partnerships and utilization rates even if supply and demand normalize in the foreseeable future. High performance computing, metaverse (AR/VR/XR), 5G and automotive remain key semi content growth drivers for the industry.
Disclaimer: This ranking consists of chip companies. Foundry revenue is not included to avoid double counting.
Background
Counterpoint Technology Market Research is a global research firm specializing in products in the TMT (technology, media and telecom) industry. It services major technology and financial firms with a mix of monthly reports, customized projects and detailed analyses of the mobile and technology markets. Its key analysts are seasoned experts in the high-tech industry.
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Samsung took the lead in 2021 with a strong DRAM and NAND flash market performance at the expense of Intel’s relatively flattish results. Major 
