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July 31, 2006 BULLETIN

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1H06 Top 15 Semiconductor Supplier Ranking Released

TSMC jumps to fourth; Fabless supplier Qualcomm breaks into Top 15

IC Insights today released its 1H06 ranking of the worldwide top 15 semiconductor suppliers (Figure 1). As shown, pure-play foundry TSMC, which ranked eighth in the full-year 2005 listing, moved into the fourth position in 1H06. Further illustrating the success of the foundry business model, for the first time ever a fabless semiconductor supplier (Qualcomm) moved into the top 15 ranking. In total, the top 15 semiconductor companies’ sales increased only 1% in 2Q06 as compared to 1Q06. 

Figure 1

Caused in part by their on-going price war, Intel and AMD registered the largest 2Q06 sequential sales declines of any of the top 15 semiconductor suppliers. It should be noted that although Intel and AMD each displayed significant 2Q06 sales declines, IC Insights expects full-year 2006/2005 semiconductor sales at Intel to be down at least 10% while AMD is on pace for a 42% surge.

As shown in Figure 1, Freescale (ranked tenth in 1H06) and Philips (ranked eleventh in 1H06) were essentially tied in 1H06 semiconductor sales with only $1 million difference between the two! However, using the 3Q06 outlooks from Freescale and Philips, in addition to IC Insights’ estimates for fourth quarter revenue, Philips is expected to finish 2006 ahead of Freescale in semiconductor sales and hold the tenth position.

One of the hottest applications for semiconductors in the first half of 2006 was for cellular phones. In fact, IC Insights forecasts that worldwide cellular phone shipments in 2006 will reach about 950 million handsets, up 18% over 2005. As shown, CDMA/WCDMA semiconductor supplier Qualcomm took advantage of the strong cellular phone market to move into the 1H06 top 15 ranking. Moreover, IC Insights estimates that Qualcomm’s full-year 2006 semiconductor sales will reach at least $4.5 billion, up 30% from 2005.

As compared to the full-year 2005 top 15 semiconductor supplier ranking, the top three positions are highly unlikely to change when the full-year 2006 results are posted. However, the number 4-6 positions are truly "up for grabs" this year. In 1H06, less than $60 million separated the fourth ranked supplier, TSMC, from the sixth ranked company, ST! As mentioned, there will also be stiff competition for the tenth spot between Freescale and Philips.

When incorporating the top 15 companies’ outlooks for 3Q06, coupled with IC Insights’ estimates for their 4Q06 sales, the top 15 semiconductor companies are on track to post an 8% increase in 2006/2005 semiconductor sales. This figure matches IC Insights’ 8% forecast for total 2006/2005 worldwide semiconductor sales growth.

About IC Insights

IC Insights, Inc., based in Scottsdale, Arizona, is dedicated to providing high-quality, cost-effective market research for the semiconductor industry. Founded in 1997, IC Insights offers coverage of global economic trends, semiconductor market forecasts, capital spending and fab capacity trends, product market details, and technology trends, as well as complete IC company profiles and evaluations of end-use applications driving demand for ICs.

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