The top 20 semiconductor companies make money from these businesses

Source: This article is compiled from the Internet by Semiconductor Industry Observer, thank you.

In early February, the Semiconductor Industry Association of the United States announced that the global semiconductor industry's revenue in 2016 reached 338.9 billion US dollars, setting a record high, and an overall increase of 1.1% over 2015. In terms of regions, the growth in mainland China was the most gratifying, with its revenue in 2016 increasing by 9.2% year-on-year.

The report pointed out that many semiconductor product departments performed exceptionally well. In terms of revenue, logic products accounted for the largest share of semiconductor revenue, with $91.5 billion in 2016 and a market share of 27.0%. Next was memory with $76.8 billion and micro-ICs including microprocessors contributing $60.6 billion, ranking second and third respectively.

Sensors and actuators were the fastest growing sector, growing 22.7% that year. Other sectors that saw growth included NAND Flash, with revenue of $32 billion and an 11.0% growth, digital signal processors, with revenue and growth of $2.9 billion and 12.5% ​​respectively, diodes ($2.5 billion and 8.7%), small signal transistors ($1.9 billion and 7.3%), and analog products ($47.8 billion and 5.8%).

So which companies control these revenues, and what are the main product divisions of each company? According to IC Insights' forecast, the ranking of the world's top 20 semiconductor companies is as follows. Let's take a look at each company's revenue in 2016 and the contribution of different product lines.

1. Intel

Intel's revenue in fiscal 2016 was $59.4 billion, up 7% from $55.4 billion in fiscal 2015; net profit was $10.3 billion, down 10% from $11.4 billion in fiscal 2015; earnings per share were $2.12, down 9% from $233 million in fiscal 2015. It is worth noting that part of the decline came from the server chip business, which has traditionally been Intel's most profitable segment.

Intel's cloud computing sales grew 30% in 2016. Large cloud computing services, such as Google's Cloud Platform, Amazon's AWS, and Microsoft's Azure, have spent billions of dollars to build large data centers to process online data and services. Server chips have therefore become Intel's main growth driver.

The Internet of Things business is also a focus of Intel's bets. However, the Internet of Things business also performed well. Except for the sluggish performance in the second quarter, the revenue and profit in the other three quarters were higher than the same period last year. The full-year revenue in 2016 was US$2.638 billion, compared with US$2.298 billion in 2015, a year-on-year increase of 14.8%; the operating profit in 2016 was US$585 million, compared with US$515 million in 2015, a year-on-year increase of 13.6%.

2. Samsung

In 2016, Samsung Electronics' total revenue was US$173.649 billion, up 0.6% from the fiscal year 2015; its operating profit was US$25.152 billion, up 10.7% year-on-year, mainly due to the efforts of its semiconductor and display panel departments.

Samsung's financial report shows that its semiconductor business had revenue of $44.007 billion in 2017, accounting for 25.34% of Samsung Electronics' revenue that year, and operating profit of $11.699 billion, with an operating profit margin of 26.58%, an increase of 7.5% compared with 2015. The main source of revenue is memory.

According to Samsung's data, in 2016, Samsung memory generated revenue of US$325.67 billion, accounting for 74% of Samsung's semiconductor revenue, and increased by 10% compared with 2015.

According to Samsung, this is mainly due to the strong demand for memory in terminals. Samsung estimates that in 2017, the strong demand from the mobile and server industries will bring strong growth momentum to Samsung. And DRAM will also advance to 1Xnm. In addition, Samsung will also enhance the competitiveness of its 64-layer V-NAND in 2017. In addition, it will focus on wafer fab customer service and the promotion of 10nm related products, which will constitute Samsung's revenue momentum in 2017.

The display division's revenue is also Samsung's revenue pillar.

In 2016, thanks to the strong performance of OLED business, Samsung's display division revenue was 23.165 billion US dollars, but due to the transfer of TV panel production line, Samsung's DP revenue decreased by 2% compared with 2015. However, considering that Apple iPhone8 may switch to OLED, this business is bound to bring better financial performance to Samsung.

3. TSMC

According to the financial report, TSMC's revenue in 2016 reached US$29.765 billion, an increase of 12.4% over 2015, and its net profit after tax reached US$10.495 billion, also a 9% increase over 2015. The following data can be obtained by breaking down TSMC's revenue in 2016:

In terms of application, TSMC's main revenue in 2016 came from the consumer sector, accounting for 32% of its total revenue, while communications and computers followed with 16% and 15% respectively.

But if we distinguish from the technology, the technology node that contributed the most to TSMC's revenue in 2016 was 16/20nm, accounting for 28% of TSMC's revenue share. The next one was 28nm process, which accounted for 26% of revenue. Compared with 2015, the growth of 16/20nm new process was faster, but 28nm remained unchanged. Looking forward to the new year, TSMC's promotion of 10nm will also bring some good performance.

4. Qualcomm

According to Qualcomm's GAAP data for fiscal year 2016, Qualcomm achieved full-year revenue of US$23.6 billion (RMB 159.5 billion), a year-on-year decrease of 7%; and achieved net profit of US$5.7 billion (RMB 38.5 billion), a year-on-year increase of 8%;

Qualcomm CDMA Technologies (QCT) shipped 842 million chips and achieved revenue of $15.409 billion, but it was 10% lower than in 2015. Pre-tax profit dropped from $2.465 billion in the previous year to $1.812 billion, a drop of 26%. Qualcomm Technology Licensing (QTL) achieved revenue of $7.664 billion, a 4% drop from the previous year. Pre-tax profit also dropped 5% from the previous year to $6.528 billion. It is worth mentioning that the pre-tax profit margin of Qualcomm Technology Licensing was as high as 85% in 2016.

From the perspective of equipment, the estimated shipment volume of 3G/4G equipment is 1.364 billion to 1.380 billion units, and the estimated average selling price of 3G/4G chips is US$192 to US$198 per unit.

5. Broadcom

According to the financial report of the new Broadcom, their net revenue in 2016 was $13.24 billion, up 95% from 2015, mainly due to the merger of Broadcom and Avago. The gross profit of the new Broadcom was $5.84 billion, accounting for 44.9% of the revenue. In 2015, these two figures were $3.553 billion and 52.1% respectively.

The largest revenue contributor is the wired infrastructure business, which brought in $2.074 billion in revenue in the fourth quarter of 2016. There are also enterprise storage, industrial and other product areas.

6. SK Hynix

SK Hynix is ​​the world's second largest memory chip manufacturer, second only to Samsung Electronics. In fiscal 2016, their revenue was $15.478 billion, down 9.3% from 2015. Their gross profit was $5.77 billion. From the perspective of product lines, DRAM and NAND are the main revenue sources for SK Hynix.

From the application analysis, the largest consumer of DRAM comes from the mobile field, followed by the server market, which is also an important part of SK Hynix's DRAM revenue. PC revenue ranks third in SK Hynix's DRAM revenue. The rest are graphics and consumer markets.

When it comes to NAND, embedded mobile products make the biggest contribution, followed by SSDs, and then USB/cards.

From the above data, we can see that SK Hynix is ​​extremely dependent on mobile devices, whether it is DRAM or NAND Flash. As we all know, the current mobile market is shrinking, and DRAM is an important component in PCs. Therefore, SK Hynix needs to find a more promising development direction.

7. Micron

From Micron's financial report, we can see that Micron's revenue in 2016 was $12.399 billion, down 23.4% from $16.192 billion in 2015. Micron's gross profit was $2.505 billion, with a gross profit margin of 20%. From the product perspective, Micron's products are mainly composed of DRAM and non-volatile storage, among which DRAM is the largest contributor to Micron's revenue, but in the past few years, the dominance of this business has been weakening.

In 2016, Micron's DRAM revenue was $7.207 billion, accounting for 58.13% of Micron's total revenue. However, this figure was 63.8% and 68.2% in 2015 and 2014 respectively. Therefore, in 2016, facing the impact of DRAM, Micron chose to acquire Taiwan's Inotera to expand its influence in the DRAM field.

From the perspective of departments, Micron's revenue is mainly composed of four departments: CNBU, SBU, MBU and EBU. CNBU is the computing and networking business unit, SBU is the storage business unit, MBU is the mobile business unit, and EBU is the embedded business unit.

From the above table, we can see that EBU is the department that contributes the most to Micron's revenue, but its share is shrinking every month. In 2016, it brought in revenue of US$4.529 billion. The revenue of SBU department is Micron's second largest revenue department. MBU is the third largest business department. It is important to remind you that in 2016, the revenue of this department declined significantly compared with the previous year, with a decline of 30.42%.

In terms of operating income, the SBU department suffered the largest loss, while the CNBU department went from a profit of $14.81 million last year to a loss of $134 million this year. This is related to the loss in the PC market and Micron's lack of response. It is also worth mentioning that the operating income of the MBU department fell by as much as 96.5%.

Therefore, the mobile phone and PC markets are performing poorly, and Micron needs to find a better direction for growth.

8. Texas Instruments

According to the financial report released by Texas Instruments on January 25, in 2016, the company's revenue was US$13.37 billion, a 2.8% increase from US$13 billion in 2015. Its net income was US$3.595 billion, a 20.39% increase from US$2.986 billion in 2015.

Its revenue is mainly composed of two businesses: analog and embedded business, which is also the main product direction of TI. Among them, the analog business is the largest part of its revenue. According to the financial report, due to the growth of Silicon Valley Analog and High Performance Analog, as well as the growth of power management products, TI's analog business revenue increased by 2% in 2016 compared with the previous year;

In the embedded business, the growth of embedded processors brought an 8% revenue growth and a 34% operating profit growth; as for others, according to Texas Instruments, DLP's growth is very good, but due to the shrinkage of ASIC products and calculator business, the revenue of this part decreased by 3% year-on-year, and the operating profit decreased by 2%.

In the final analysis, this is mainly due to Texas Instruments' abandonment of its mobile processor business a few years ago and its focus on industrial and automotive businesses.

9. Toshiba

Toshiba's 2016 financial report was dismal due to the drag of its nuclear business unit.

After the market closed on February 14, Toshiba released its forecast financial report, estimating that it would lose 499.9 billion yen (4.4 billion U.S. dollars) in the first three quarters of fiscal 2016, and that its annual net loss for the fiscal year ending March 31 would reach 390 billion yen (3.44 billion U.S. dollars). As Toshiba's pillar business, the U.S. nuclear energy business invested in may lose up to 712.5 billion yen (about 6.27 billion U.S. dollars) this year. However, some analysts predict that the figures Toshiba will announce will be worse than expected.

NAND chip-based business has always been Toshiba's core and most profitable business. In the global market, one-third of flash memory is supplied by Samsung, while Toshiba ranks second with a market share of 20%. Following closely behind is Western Digital. Micron and SK Hynix each account for 10%.

Through self-sufficiency in NAND chips, Toshiba and Western Digital can vertically develop new storage devices at a lower cost, including USB flash drives, solid-state drives, memory cards, etc., thereby obtaining higher profits.

But now in order to make up for the losses caused by nuclear power, Toshiba is planning to sell this business. If it really does this, it is still unknown whether it can return to this list next year.

10. NXP

According to NXP's financial report, in 2016, the company's revenue was US$9.498 billion, an increase of 56.1% compared with 2015. The gross profit was US$4.069 billion, with a gross profit margin of 42.8%.

From the product perspective, NXP's largest revenue source in 2016 came from automotive electronics, with revenue of $3.379 billion, up 152% from 2015, which is the mainstay of NXP. In the future wave of automotive intelligence, this is NXP's best asset; secure connection devices are NXP's second largest product line, contributing $2.146 billion to NXP's revenue, also up 70% year-on-year; secure interfaces and infrastructure are NXP's third largest revenue source, with revenue from this business increasing by 59% in 2016 over 2015, and the final revenue was $1.824 billion. Next is standard products, which generated revenue of $1.22 billion, a slight decrease from the previous year. The security authentication solution brought NXP $737 million in revenue, but down 24% year-on-year.

It can be said that high-performance mixed-signal products other than standard products are the main source of NXP's revenue, accounting for 86.89% of NXP's revenue in 2016.

11. MediaTek

MediaTek's revenue in fiscal year 2016 was US$8.788 billion, a year-on-year increase of 29.2%. Its gross profit was US$3.829 billion, and its gross profit margin also fell below 35.6%.

MediaTek originally estimated that the shipment of smartphone and tablet chips this quarter could reach 145 million to 155 million sets, a quarterly increase of less than 6.9%. The growth rate was originally suppressed by the shortage of its own chips. Limited by the tight utilization rate of the foundry's 28nm production capacity, the market expects that the shortage of MediaTek chips may continue until the end of the year.

In particular, the shortage of panels is more serious than that of mobile phone main chips, which has further disrupted the order of the mobile phone supply chain in the third quarter, making the market worry that MediaTek will face pressure to achieve its financial forecast for this quarter. MediaTek’s spokesperson emphasized that its view on this quarter’s financial forecast has not changed. Legal persons believe that even if the company’s performance this quarter reaches the target, it may be close to the low target.

12. Infineon

Infineon's revenue in 2016 was 6.473 billion pounds (about 8.053 billion U.S. dollars), and compared with 2015, Infineon's revenue in 2016 increased by 12%. The gross profit was 2330, which made the gross profit margin as high as 36%.

In terms of business scope, Infineon's main revenue in 2016 came from automotive electronics, accounting for 41% of total revenue, followed by energy management and related markets, which accounted for 32% of revenue in 2016. The next businesses include industrial power management, chip cards, etc.

Infineon believes that the future growth of hybrid semiconductors will bring new growth opportunities to Infineon.

As for the products that contribute to Infineon's revenue, they can be centered around renewable energy, automation, brushless DC motors, network and sensor systems, security and automotive electronics.

It is worth mentioning that Infineon has the largest market share in the world in power semiconductor markets such as IGBT.

13. STMicroelectronics

According to ST's financial report, their revenue in 2016 was $6.97 billion, an increase of 1.1% from $6.9 billion in 2015. Excluding delisted businesses (old mobile products, camera modules and set-top boxes), net income increased by 2.4%. The gross profit margin for the whole year of 2016 was 35.2%, an increase of 140 basis points from 33.8% in 2015. The main reasons for the increase in gross profit margin were improved manufacturing efficiency, the positive impact of exchange rate factors excluding hedging, reduced idle capacity expenditure and product portfolio optimization. However, normal price pressure offset some of the growth momentum.

ST's operating profit increased significantly in 2016, from $109 million in 2015 to $214 million. Operating profit before impairment and restructuring charges (1) also increased significantly in 2016, from $174 million in 2015 to $307 million. The increase was mainly due to the positive impact of exchange rate factors excluding hedging, manufacturing efficiencies, product mix optimization and lower operating expenses, but was partially offset by pricing pressure and lower R&D funding.

In terms of specific products, the bulk of ST's revenue comes from the Automotive and Discrete Devices Division (ADG). In 2016, the division's revenue was $2.813 billion, accounting for 40.34% of the total revenue, a slight increase compared to 2015; the Microcontroller and Digital IC Division (MDG) is ST's second largest revenue source, with a slight year-on-year decline, with revenue of $2.285 billion in 2016, accounting for 32.77% of the revenue that year, also a year-on-year decline; the third is the Analog Devices and MEMS Division (AMG), with revenue of $1.584 billion in 2016, accounting for 22.72%, and a significant decline; the rest comes from other product lines.

In terms of profit, ST's net profit for the full year of 2016 increased by 58%, totaling US$165 million, with earnings per share of US$0.19, while in 2015 its net profit was US$104 million, with earnings per share of US$0.12.

14. APPLE

Thanks to its huge sales volume, Apple's semiconductor business, such as processors, has brought Apple good revenue and has surpassed many pure semiconductor companies in the global semiconductor rankings.

In 2016, Apple's R&D expenses reached $10 billion, far higher than the $8.1 billion in 2015 and $6 billion in 2014. As a percentage of sales revenue, Apple spent 5% of its revenue on R&D last year, higher than the 3% in the past.

In the chip field, Apple has been designing its own A-series processors and outsourcing them to Samsung Electronics and TSMC. Apple does not need to purchase application processors from Qualcomm, which has become a differentiating highlight of Apple phones. In addition, Apple is also designing dedicated chips for various small devices, such as Apple Watches and wireless headphones.

In addition to the A series chips designed for iPhone, iPad and Apple Watch, Apple has begun to develop chips for more and more product lines. In 2015, we saw Apple's first SiP (System-in-Package) chip on the first generation Apple Watch: Apple S1, an ultra-micro chip designed for wearable devices, which was upgraded to the second generation S2 in 2016.

The Airpods released in 2016 are equipped with Apple's W1 chip. I believe that with subsequent updates, these parts will continue to contribute to revenue. However, the financial report does not show specific data from different products and departments.

15. SONY

One of the most important things to note about SONY's semiconductor business is its CMOS Sensor service. In recent years, SONY's series of products have defeated competitors including OV and Samsung and become the only choice for flagship mobile phones.

Since Sony's fiscal year ends in March, the revenue we can see now is the official forecast of Sony. According to Sony's official information, Sony has revised up its image sensor sales target for this year (April 2016-March 2017) from US$4.312 billion to US$4.752 billion, a 13% increase from last year's US$4.203 billion. Sony's CIS photosensitive components account for 80-90% of the company's revenue, of which about 90% are used in mobile phones and 10% are used in digital cameras.

It is reported that Sony will currently maintain its monthly image sensor production capacity at 85,000 pieces, and production after April 2017 will be determined based on demand trends at that time.

16. Nvidia

On February 18, computer graphics chip maker Nvidia released its fourth quarter and full-year financial report for fiscal year 2016. According to the financial report, Nvidia's revenue in 2016 reached $5.01 billion, and its gross profit margin reached an all-time high of 56.1%. Compared with 2016, Nvidia's revenue increased by 7%.

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The GPU department is the highest revenue source for Nvidia. In 2016, the revenue contributed by the department reached 4.187 billion US dollars, accounting for 83.57% of Nvidia's revenue that year. It increased by 9% compared with 2015. This is mainly due to Nvidia's enthusiasm for artificial intelligence and deep learning, and the GPU with inherent advantages can bring good profits. Nvidia, which entered the market early, became a beneficiary.

It should be mentioned that among NVIDIA's GPUs, the high-end GeForce GPU is developed for games, while the Tesla series is developed for data centers. The data growth brought by cloud services has brought good income to the Tesla series.

In addition, revenue from the Tegra business fell 3% from 2015, from US$579 million to US$559 million.

17. Renesas

Since I couldn't find Renesas' full-year revenue for 2016, I'd like to share the data for the first half of the year with you.

Renesas Electronics announced its consolidated financial results for the first half of fiscal year 2016 (from April 1, 2016 to September 30, 2016). Net sales for the first half of fiscal year were 304.6 billion yen, operating profit was 33.1 billion yen, and net profit was 19.4 billion yen.

18. GlobalFoundries

According to data, GF's sales in 2016 grew by 10% to $5.545 billion, and its market share remained at 11%. GF is the second largest foundry in the world. After obtaining a 14-nanometer technology license from Samsung, it has entered mass production. As for the 7-nanometer technology, GF also plans to conduct trial production in the first quarter of 2018. It has already received design and certification from customers. It is mainly designed for the high-performance computing market, especially for chips used in servers and data centers.

19. ON Semiconductor

Total revenues for 2016 were $3,906.9 million, an increase of approximately 12% from $3,495.8 million in 2015. Total revenues for 2016 included a contribution of approximately $411 million from Fairchild. In 2016, the Company recorded GAAP net income of $182.1 million, or $0.43 per diluted share. GAAP income before income taxes for 2016 included special item charges of $231.5 million, including $104.8 million of amortization of related acquired intangible assets. Details regarding the remaining charges and special items are set forth in the attached tables. In 2015, the Company recorded GAAP net income of $206.2 million, or $0.48 per diluted share. GAAP income before income taxes for 2015 included net special item charges of $159.8 million.

ON Semiconductor's terminal markets include automotive, communications, computers, consumer, and industrial/aerospace/defense/medical.

20. UMC

CEO Yan Bowen pointed out that in 2016, UMC's consolidated revenue reached 147.87 billion yuan, an increase of 2.1% over 2015, and its net profit was 8.316 billion yuan, a decrease of 38.2% over 2015, with EPS of 0.68 yuan per share. In the fourth quarter of 2016, the revenue of wafer manufacturing projects was 38.22 billion yuan, and the overall capacity utilization rate increased to 94%. The shipment volume was about 1.66 million pieces based on 8-inch wafers.

Overall, UMC's 28- and 40-nanometer capacity utilization rates in the fourth quarter remained above 90%. In addition, in the manufacturing of 8-inch wafers, the 8-inch capacity utilization rate was close to full capacity due to the increase in demand in the consumer electronics and communications markets.

Looking ahead to 2017, Yan Bowen said that in the first quarter, due to seasonal adjustments, although the capacity utilization rate has declined, it will still maintain a level of about 90%. As for wafer shipments, it is also expected to decline by 1%, while the average sales price of products will decline by about 3%.

In 2016, UMC's overall capital expenditure reached US$2.8 billion due to the need to build a 12-inch fab in Xiamen. After the Xiamen 12-inch fab officially entered mass production in November 2016, it is estimated that the capital expenditure in 2017 will drop to US$2 billion.

As for the 14nm advanced process, after communication and cooperation discussions with customers, the performance of the 14nm process technology in terms of electrical speed and power consumption has met industry standards, and the recent yield has also met customer requirements. It is expected to start shipping from the first quarter of 2017.

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