Exclusive extracts from this 70-page-long report:
- Who are the key players?
Leading chipmakers are mostly fabless, i.e. they outsource the manufacture of silicon wafers, and a growing number of them are seeking to externalise other low added-value activities of the production process such as testing and packaging. Market leaders are therefore overall becoming leaner and asset-lighter, focusing on higher value-added operations such as R&D, supply-chain management and sales. A third type of companies, focused on intellectual property (e.g. ARM), exclusively specialises in designing semiconductors and licensing intellectual property to other chip manufacturing companies. [...]
Groups analysed in this report include: Intel, Samsung, Qualcomm, SK Hynix, Broadcom, Micron Technology, Texas Instruments, Western Digital, STMicroelectronics and NXP Semiconductors.
- What are the players' strategies?
Vertically integrated players such as Intel and Samsung continue to invest in new process technologies to maintain their manufacturing leadership, focusing on increasingly smaller nodes (in 2019, Samsung and #1 pure-play foundry TSMC confirmed the successful development of the 5nm feature size, ahead of Intel, which has yet to provide details on the matter). Other large players, including the second biggest foundry, Global Foundry, have thrown in the towel when it comes to next-generation process node development due to the high costs involved.
- What are the players' key growth and profitability drivers?
In 2017 and 2018, the operating income of semiconductor companies improved remarkably on the back of record demand and average selling prices. In line with overall industry trends, leading chipmakers' profitability peaked at 31.2% and 37.2% in 2017 and 2018, respectively. Large chipmakers, especially memory specialists, have been the most profitable over the past five years.