August 02, 2011

1H11/1H10 Top 20 Semiconductor Sales Increase by 8%!

Exchange rate effects play big role in 1H11 sales when converted to U.S. dollars

A review of the 1H11 top semiconductor suppliers will be included in IC Insights' August Update, which is part of the new "Half-Year" subscription to The McClean Report. As shown in Figure 1, Intel remained firmly in control of the number one spot in the ranking. In fact, Intel extended its lead over second-ranked Samsung by registering a 43% higher sales level than Samsung in 1H11 as compared to a 24% margin for all of 2010.

Although Nvidia's 1H11/1H10 sales increased by only 1%, it replaced Panasonic in the top 20 ranking. As shown in Figure 1, there are two pure-play foundries in the top 20 ranking. Excluding these two foundry companies, Marvell and ON Semiconductor would have been included in the ranking.

In total, the top 20 semiconductor suppliers showed an 8% increase in 1H11 sales as compared to 1H10. This growth rate is four points greater than the worldwide 1H11/1H10 semiconductor market growth rate of 4%. Unlike last year, the memory companies did not secure the top growth rate positions in the ranking this year. In fact, as shown below, the top five 1H11/1H10 semiconductor sales growth rate increases were logged by non-memory suppliers.

1. Infineon; 30% growth from continuing operations (23% using 1H10 exchange rates)
2. Qualcomm; 29% jump due to surging smartphone IC sales
3. Intel; 23% increase spurred in part by its acquisition of Infineon's wireless business
4. TSMC; 20% growth (10% using 1H10 exchange rates)
5. Broadcom; 18% increase from strong wireless IC sales

Of the big five memory suppliers in the top 20 ranking (i.e., Samsung, Toshiba, Hynix, Micron, and Elpida), only Samsung and Toshiba registered 1H11/1H10 growth. As shown in Figure 1, even with a stronger yen, DRAM-dependent Elpida registered the worst 1H11/1H10 performance with a sharp 37% drop in revenue. In total, 10 of the top 20 suppliers outperformed the total worldwide semiconductor industry 1H11/1H10 growth rate of 4%.

Figure 1

In 1H11, the Japanese yen appreciated 12%, the Taiwan dollar 10%, the euro 6%, and the Korean won 5% versus the value of the U.S. dollar in 1H10. As shown in Figure 2, 10 of the top 20 semiconductor suppliers received a "boost" in sales value in 1H11 when revenue figures expressed in their local currencies were converted into U.S. dollars. In fact, these 10 semiconductor suppliers, in total, would have registered a 4% decline in 1H11/1H10 sales instead of a 4% increase if their revenue figures were expressed in their local currencies. Moreover, the top 20 companies' total 1H11/1H10 sales growth rate of 8% would have been cut in half to 4% if 1H10 exchange rates were used instead of the current exchange rate figures. It should be noted that both ST and NXP originally report all of their financial results in U.S. dollars.

In total, IC Insights expects modest growth in the worldwide semiconductor market in the second half of 2011. Although the semiconductor market in the second half of the year typically registers a seasonal increase of 10% as compared to the first half, IC Insights expects the 2H11/1H11 semiconductor market to grow only 6%, yielding a full-year 2011 semiconductor industry growth rate of 5%.

Figure 2

Report Source

Advance data from the August Update to The McClean Report 2011.

The August Update is included as part of the new "Half-Year" subscription to The McClean Report, which also includes the recently released 250-page Mid-Year Update to The McClean Report. The Mid-Year Update will provide you with the proper perspective you need to make your plans for the remainder of 2011 and beyond. Although this is an extremely volatile timeperiod in the IC industry and worldwide economy, IC Insights' "Half-Year" subscription to The McClean Report will help guide you through these uncertain times.

Note: Current 2011 McClean Report subscribers will receive automatically receive everything being offered under the"Half-Year" McClean Report service as part of their full-year subscription.

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