With the arrival of 2024, market uncertainty still reigns in the global semiconductor industry, even though the automotive sector and emerging AI applications are widely anticipated to be the future growth drivers that will fuel market recovery.
Against this backdrop, DIGITIMES Asia compiled the list of the top 100 global semiconductor companies based on their market values in dollar terms at the end of 2023, which covers IDM, fabless chip firms, pure-play foundries, memory makers, equipment and materials providers, etc. While the top 10 of the list are dominated by leading players like Nvidia, Broadcom, TSMC, Samsung, AMD, Intel, Qualcomm, and Texas Instruments, there are newcomers as well - notably Arm (18th), United Nova Technology (87th), and Nexchip Semiconductor (89th). All three companies were listed in 2023.
As of December 31, 2023, Arm had a market cap of US$77 billion. The UK-based chip IP vendor went public on Nasdaq after a two-year failed negotiation that saw Nvidia attempting to acquire Arm from SoftBank for approximately US$40 billion. Notably, following the Arm IPO, SoftBank still retains about 90% ownership of Arm. According to the company's earnings for the second fiscal quarter ending on September 30, 2023, its fiscal second-quarter revenue was US$806 million, up 28% year-on-year. Its licensing sales were US$388 million, up 106% year over year, while its royalty revenue was US$418 million, down 5% year-on-year.
According to Arm, it has since diversified its revenue source after its acquisition by SoftBank for roughly US$32 billion in 2016. Roughly two-thirds of its sales were generated from the mobile sector, which accounts for less than half of the company's revenue with the remaining portion divided by consumer electronics, IoT, cloud & networking, and automobile sectors. Nevertheless, with a 99% share of the mobile SoC market. Arm still regards the mobile sector as its main growth driver, while Arm regards cloud computing as the fastest-growing market, in which Arm has a 10% market share largely thanks to Amazon's Graviton chips.
Before its IPO in September, Arm unveiled a new business model that would offer licensed SoC solutions to customers instead of IP licensing, injecting further uncertainty into its prospect alongside the rise of RISC-V, an open-standard instruction set architecture (ISA) that has been gaining popularity.
United Nova Technology: the largest MEMS foundry in China
Based in Shaoxing, China, United Nova Technology was founded in 2018 under the name Semiconductor Manufacturing Electronics Corp. (SMEC) as a joint venture between China's largest and currently most advanced foundry, Semiconductor Manufacturing International Corp. (SMIC), and the government of Shaoxing. The company focuses on wafer foundry in addition to packaging & testing. As indicated by the company's half-year report for 2023, SMIC remained the second largest shareholder of United Nova Technology with 14.15% of shares.
After going public on the Shanghai Stock Exchange STAR Market in May 2023, United Nova Technology attained a market cap of about US$35.4 billion as of December 31, 2023. It has become the country's largest foundry and the world's fifth largest in terms of Micro-Electro-Mechanical Systems (MEMS). When it comes to automotive Insulated Gate Bipolar Transistor (IGBT, the company is also the largest in China, seeking to seize the trend of domestic substitution as China rises to become the world's largest market for IGBT and MOSFET - thanks to the growth of its new energy vehicle (NEV) industry - albeit with the foreign suppliers still having a larger share in the IGBT and high-end MOSFET markets. In the first half of 2023, United Nova Technology already realized the production of automotive-grade Silicon Carbide (SiC) MOSFETs at a scale of 2,000 units per month.
In the third quarter of 2023, the foundry saw revenue of CNY1.3 billion, a 16.5% increase year-on-year. Revenue for the first half of 2023 was CNY2.5 billion, up 24% year-on-year. The NEV sector accounted for 51.86% of sales, a year-on-year increase of 510.67%; the industrial sector took up 29.60%, with a year-on-year growth of 72.41%; the high-end consumer electronics sector accounted for 18.54% of the revenue comes from, a year-on-year decrease of 49.27%. The company sees NEVs and industrials as the company's main engines of growth.
Noting that many Chinese foundries are investing in power semiconductors and MEMS, United Nova Technology considers overcapacity to be a potential risk as it continues to convert its production line for consumer electronics to address higher-margin markets like NEV, smart grid, and Internet of Things (IoT).
Nexchip Semiconductor: rising to be the third-largest foundry in China
Based in Hefei, Anhui Province, Nexchip was founded in 2015 as a joint venture between Taiwan-based Powerchip Technology Corp. and Hefei City Construction Investment Group and was also the first 300mm (12-inch) wafer foundry in the province. Dedicated to the manufacturing of display driver ICs (DDIC), microcontrollers (MCU), CMOS Image Sensors (CIS), and power management ICs (PMIC), Nexchip saw its revenue surpass CNY1 billion in 2022 and achieved the target to grab the largest market share in DDIC contract manufacturing. In May, it went public on the Shanghai Stock Exchange STAR Market and achieved a market cap of US$34.6 billion as of December 31, 2023.
According to Nexchip, its 150nm and 55nm nodes are already in volume production, and the R&D on 40nm and 28nm platforms is underway. However, due to the industrial downturn, the company's 2023 half-year report revealed CNY2.97 billion in revenue, a year-on-year decline of 50.4%. Among them, DDIC accounted for 87.84% of sales, followed by CMOS Image Sensors (4.08%), PMIC (5.77%), and MCU (1.35%). In terms of process nodes, Nexchip's 90nm platform accounted for 49.92% of sales, followed by 110nm (31.65%), 150nm (13.6%), and 55nm (4.83%).
As pointed out by the company, overconcentration on the DDIC sector could be a potential risk, subjecting Nexchip's performance to order fluctuation and its bargaining power. Therefore, it becomes necessary to further diversify into CIS, MCU, and PMIC platforms. The five largest customers of Nexchip, in particular, accounted for 66.47% of total sales, rendering Nexchip overdependent on the performances of these major customers.
