Sales of the top 15 semiconductor companies grew by 24 percent in the first half of 2018 (1H18) compared to the 1H17, which is four points higher than the total worldwide semiconductor industry growth during the same period, according to IC Insights’ latest update to the McLean Report. The research also shows that the top three memory suppliers — Samsung, SK Hynix, and Micron — each grew greater than 35 percent year-over-year in the 1H18.
The tremendous growth rate can be attributed to increased demand for electronics across end markets. Semiconductor content alone in an electronic system is forecast to reach 31.4 percent in 2018, up from an all-time record of 28.8 percent in 2017, said IC Insights. Electronic component shortages, including discrete semiconductors and memory devices, are partly attributed to increased electronic content in the products of traditional market segments, such as automotive and industrial, as well as new applications centered around the cloud, internet of things, and emerging 5G applications.
IC Insights expects the global electronic systems market will grow five percent in 2018, reaching $1.6 billion, while the total semiconductor market will grow 14 percent in 2018, exceeding $500 billion in 2018.
IC Insights said “. . . the big jump in the average semiconductor content in electronic systems in 2018 is expected to be primarily due to the huge surge in DRAM and NAND flash average selling prices (ASPs) and average electronic system sales growth this year.”
The report also finds that fourteen of the top 15 companies had sales of at least $4 billion in the 1H18, up by three companies in the 1H17. Semiconductor makers had to earn a little more than $3.7 billion in sales to make the top 15 ranking. Intel lost its number one position to Samsung in the first quarter of 2017 as well as in the full-year 2017 ranking. Samsung now has 22 percent more semiconductor sales than Intel in the first half of 2018, up from one percent more total sales in the 1H17.
Memory devices are expected to account for 84 percent of Samsung’s semiconductor sales in 2018, up from 81 percent in 2017. The company’s memory revenue is forecast to reach $70 billion in 2018, up 31 percent.
In addition, DRAM is forecast to be the largest IC product category in 2018 with sales of $101.6 billion, up 39 percent from last year, according to IC Insights. If DRAM sales reach $101 billion, it will be the first time an individual IC product category has surpassed $100 billion in annual sales, said the market researcher. DRAMs will be followed by NAND flash with an estimated $62.6 billion in sales this year. The two memory categories are expected to account for 38 percent of the total $428 billion IC market in 2018.
The report also finds that the top 15 semiconductor companies includes seven suppliers headquartered in the U.S., three in Europe, two each in South Korea and Taiwan, and one in Japan. Eleven of the top 15 companies experienced double-digit year-over-year growth in the 1H18 with seven companies tallying ≥20% growth. These include the five big memory suppliers — Samsung, SK Hynix, Micron, Toshiba/Toshiba Memory, and Western Digital/SanDisk — as well as Nvidia and ST.
The ranking also includes one pure-play foundry — TSMC — and four fabless companies. IC Insights said if TSMC were excluded, Apple would have ranked at number 15. However, Apple does not sell any of its processors, instead using them for its own products. IC Insights pegs the “sales value” of its processors at $3.5 billion in the 1H18.