2016 Marks Year of Recovery for Global Semiconductor Market, IHS Markit Says
DENVER (March 30, 2017) – IHS Markit (Nasdaq: INFO), a world leader in critical information, analytics and solutions, today announced that the worldwide semiconductor market showed signs of recovery in 2016 following a down year in 2015. In 2016, the market posted a year-end growth rate of 2 percent with chip growth seen across multiple market segments. Global revenue came in at $352.4 billion, up from $345.6 billion in 2015.
Key Growth Drivers
Key drivers of this growth were DRAM and NAND flash memory, which grew more than 30 percent collectively in the second half of 2016. Key to this turnaround was supply constraints and strong demand, coupled with an ASP increase. We expect these factors to drive memory revenue into record territory throughout 2017.
Semiconductors used for automotive applications were also a key driver of 2016 growth, with a 9.7 percent expansion by year-end. Chip content in cars continues to climb, with micro components and memory integrated circuits (IC) leading the pack, both experiencing over 10 percent growth in automotive applications.
“The strong component demand that drove record capital expenditures in 2016 also provided the industry with advanced technology platforms which will support further semiconductor revenue growth in 2017,” said Len Jelinek, Senior Director and Chief Analyst for Semiconductor Manufacturing at IHS Markit.
Continuing a recent trend, the semiconductor market saw another year of intense consolidation with no signs of slowing down. The year began with the close of the biggest-ever acquisition in the semiconductor industry. Avago Technologies finalized its $37 billion acquisition of Broadcom Corp. to form Broadcom Limited, which jumped to rank fourth in terms of market share (Avago previously ranked 11th). This acquisition resulted in the newly formed company increasing its market share in several market segments, including taking a large lead in the wired application market.
“After some selective divestiture, Broadcom Limited has focused on market segments where its customer base holds dominant market share positions. These also tend to be markets which have fairly stable and visible TAM growth,” said Senior Analyst Brad Shaffer. “These characteristics may help entrench the company’s market share positions in areas where it chooses to compete,” added Shaffer.
Among the top 20 semiconductor suppliers, ON Semiconductor and nVidia enjoyed the largest revenue growth, followed closely by MediaTek. ON and MediaTek achieved growth through multiple acquisitions, while nVidia saw an enormous demand for its GPU technology as it moves into new markets and applications.
Qualcomm remained the top fabless company in 2016 while MediaTek and nVidia moved into the number two and three spots, respectively. The fabless company with the largest market share gain was Cirrus Logic, a major supplier for Apple and Samsung mobile phones. They moved up five spots in 2016, to number 10.
Intel remains in the number one spot for semiconductor suppliers, followed by Samsung. Qualcomm comes in at number three, with plans to increase its market share in 2017 with its pending acquisition of NXP.
Find more information on this topic in the latest release of the Competitive Landscaping Tool from the Semiconductors & Components service at IHS Markit.
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