The top 20 ain’t what it used to be

Looking back, the make-up of today’s top-20 semiconductor companies is far different from even ten years ago.

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Looking back on data of the annual top 20 semiconductor companies since 1987, it’s amazing how much has changed. In my last post I looked at all the companies that went bankrupt, spun-out, or merged their way into or out of the top 20 list. Change is definitely a constant in this field. Now, let’s look at the makeup of the 2010 list of top semiconductor companies. Here is the list, as generated by iSuppli.

1 Intel Corporation
2 Samsung Electronics
3 Toshiba Semiconductor
4 Texas Instruments
5 Renesas Electronics
6 Hynix
7 STMicroelectronics
8 Micron Technology
9 Qualcomm
10 Broadcom
11 Elpida Memory
12 Advanced Micro Devices
13 Infineon Technologies
14 Sony
15 Panasonic Corporation
16 Freescale Semiconductor
17 NXP
18 Marvell Technology Group
19 MediaTek
20 NVIDIA

It’s important to note that foundries are excluded from this accounting – their revenue is attributed to the companies placing the orders. Thus, this is a semiconductor product-based top-20 list, not a semiconductor maker-based top-20 list.

And that distinction is obvious when looking at the make-up of the 2010 top-20. Six of the top 20 companies are fabless. Another seven are “fab-lite”, meaning they have stopped investing in new fabs or leading-edge manufacturing. That leaves just seven leading-edge semiconductor manufacturers in the top 20. Of those, four make mostly memory (80% of Samsung’s revenue came from memory), two make mostly logic, and one (Toshiba) makes a fair amount of both.

As a point of reference, if TSMC’s revenue were attributed to TSMC rather than their customers, they would be in fourth place, just barely behind Toshiba. The next two largest foundries, UMC and GlobalFoundries, would find themselves near the bottom of the top 20.

So, we have seven semiconductor manufacturers and three foundries that claim to still want to invest in leading-edge manufacturing capacity. That’s a far cry from just 10 years ago, when all 20 of the top 20 semiconductor companies were committed to building new leading-edge fabs. And even this list of 10 companies can’t really afford to play at the bleeding edge. Only five of them (Intel, Samsung, Toshiba, TSMC, and Hynix) have over $10B/year in semiconductor revenue, probably the minimum needed to build that next $5B mega fab. Add EUV and 450mm wafers into the mix, and you can see that there will be very few players at this ultra-high end of manufacturing.

It is conventional wisdom that the last decade has been one of extreme consolidation in the semiconductor business. Next post, I’ll look at the numbers to see how well that conventional wisdom holds up.