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Fabless chip company sales continued their steady climb over the last year, setting a new record in 2020, according to IC Insights, which also reported sluggish sales growth over the last 12 months for integrated device manufacturers (IDMs).
The market tracker forecast at the end of 2020 that combined “fabless/system” IC vendor sales jumped 32.9 percent, with the fabless sector alone accounting for roughly two-thirds of the increase. Advanced Micro Devices (AMD) was a key contributor, registering a $2.8 billion jump in 2020 chip sales.
Over the last decade, fabless chip sales have more than doubled to an estimated $130 billion in 2020, according a research note.
Looking ahead, IC Insights forecasts that “fabless/system IC suppliers, and the IC foundries that serve them, will continue to be a strong force in the total IC industry landscape with their percentage share of the total IC market expected to remain in the low 30s over the next five years.”
Those gains came at the expense of the IDMs, which recorded an anemic 6 percent sales increase last year despite a booming global semiconductor sector. While IDM sales remain more than double the fabless sector, an estimated $267 billion last year, the sector’s growth continues to lag the vibrant fabless/system IC sector.
IDMs had been buoyed during the memory chip boom in 2017 and 2018. Fabless vendors with little share of the global memory market shrank during the period. The situation reversed itself when the memory market went bust in 2019, with overall IDM sales declining 20 percent year-on-year.
Meanwhile, the fabless sector’s share of the global chip market rose 3.9 percentage points in 2019 to 29.7 percent.
IC Insights is therefore forecasting that annual sales for the combined fabless/system sector will have increased 20 percent in 2020.
The market analyst notes a relatively close relationship between the annual market growth of the fabless IC suppliers and foundries. As we reported this past fall, pure-play foundry sales were expected to jump 19 percent in 2020 after declining 1 percent in 2019 and registering anemic growth over the last several years.
If AMD’s projected sales increase is indicative of the wider fabless market, CPU and GPU competitors like Intel Corp. and Nvidia are likely to drive fabless sales even higher in the year ahead. Those gains will probably continue to come at the expense of integrated device manufacturers.
By EE Times