Intel has long dominated the x86 architecture based server and PC processor market through the IDM model. At the same time, it acts as a pioneer in the semiconductor industry’s process miniaturization according to Moore’s Law. Yet, in recent years, Intel has seen continued delays in the development of 10nm and 7nm technologies. At the same time, in the ARM architecture based SoC processor market, customers can continuously and steadily obtain higher performance, lower power consumption, and more cost efficient IC design and manufacturing services through the continuous technological breakthroughs of TSMC at 10/7/5nm or even 3nm, integrated with the TSMC-led Open Innovation Platform (OIP), process and design-technology co-optimization (DTCO), and 3DFabric advanced packaging services. In addition to Apple leading the world in releasing the most advanced AP-SoC mobile processors, AMD’s PC processor market share on the client side is gradually threatening Intel. At the same time, the supply stability of the AMD Graphic and Data Center also trumps Intel and Nvidia. Furthermore, Apple’s self-developed M1/M1 pro/M1 max processors built with TSMC’s 5nm technology have been a reason for Intel’s lost Macbook series orders in the past two years which, in turn, has encouraged more brand-named manufacturers to initiate Fabless development strategies.  Companies such as Microsoft, Amazon, Google, Facebook, and Alibaba have all put forward self-developed ARM architecture solutions.

In 2020, Intel continuously spoke publicly stating that the company’s long-term core development strategy is gradually shifting from the old CPU processor business to xPU data computing services and, after revealing plans to outsource a portion of their CPU business, discussed plans to partner with TSMC. According to TrendForce’s investigations, Intel’s earlier non-CPU products such as FPGA, ASIC, RFIC, PMIC and Wi-Fi have already been outsourced to TSMC, UMC or Samsung.  As of today, Intel has officially released orders for CPU products to TSMC. Discounting cooperation in existing product lines, the division of labor between Fabless and Foundry combined with TSMC-led OIP, DTCO and 3D Fabric services will provide Intel with a multitude of choices. In addition to maintaining their original IDM model, Intel can maintain a high-margin self-developed production line and appropriate capital investment while flexibly using TSMC’s production line to create additional diversified value and maintain a competitive advantage against competitors such as AMD.

（Image credit: Google）

The semicondustor market in 3Q21 is red hot with total revenue of the global top 10 IC design (fabless) companies reaching US$33.7 billion or 45% growth YoY, according to TrendForce’s latest investigations. In addition to the Taiwanese companies MediaTek, Novatek, and Realtek already on the list, Himax comes in at number ten, bringing the total number of Taiwanese companies on the top 10 list to 4.

Qualcomm has been buoyed by continuing robust demand for 5G mobile phones form major mobile phone manufacturers with further revenue growth from its processor and radio frequency front end (RFFE) departments. Qualcomm’s IoT department benefited from strong demand in the consumer electronics, edge networking, and industrial sectors, posting revenue growth of 66% YoY, highest among Qualcomm departments. In turn, this drove Qualcomm’s total 3Q21 revenue to US$7.7 billion, 56% growth YoY, and ranking first in the world.

Second ranked NVidia, is still benefiting from gaming graphics card and data center revenue as the annual revenue growth for these two primary product departments reached 53% and 48%, respectively. In addition, professional design visualization solutions only accounted for 8% of total revenue. However, due to enduringly strong demand for mining and customers actively deploying the RTX series of high-performance graphics cards, NVidia’s product department revenue grew 148% YoY with overall revenue increasing by 55% to US$6.6 billion.

Third ranked Broadcom’s main revenue stream came from their network chip, broadband communication chip and storage and bridge chip businesses. Driven by post-COVID hybrid working models, companies are accelerating migration to the cloud, increasing demand for Broadcom chips, and driving revenue growth to US$5.4 billion or 17% YoY. AMD’s Ryzen, Radeon, and EPYC series of products in the fields of games, data centers, and servers performed well, driving total revenue to US$4.3 billion, 54% growth YoY, and fifth place overall.

In terms of Taiwanese companies, MediaTek continues to expand its global 5G rollout and, benefiting from optimization of product portfolio composition, product line specification enhancement, increase in sales volume, increases in pricing, and other factors, revenue of MediaTek’s mobile phone product line increased 72% YoY. Annual revenue of other product lines also posted double digit growth with total revenue in the 3Q21 reaching US$4.7 billion or 43% YoY, a fourth place ranking. Novatek continues to focus on its two primary product lines of system-on-chip and panel driver chips. The proportion of its OLED panel driver chip shipments has increased, product ASP has risen, and shipments have been smooth with 3Q21 revenue reaching US$1.4 billion or 84% YoY. In addition, Realtek’s revenue surpassed Xilinx to take the eighth position due to higher priced Netcom chips in 3Q21. Himax also saw significant growth in its three main product lines of TVs, monitors, and notebooks due to large-size driver chips. Revenue from large-size driver chips increased 111% YoY, driving total revenue to exceed the US$400 million mark, a 75% increase, and enough to squeeze onto this year’s ranking.

Overall, 3Q21 revenue for major IC design (fabless) companies has generally reached historic levels. Rankings for the top 7 companies remained the same as in 2Q21 with change coming in ranks 8 to 10. Looking forward to 4Q21, TrendForce believes Taiwanese IC design (fabless) companies will generally lean conservative. In addition to the electronics industry moving into the traditional off-season, a slowing of demand for consumer applications and customer-end materials supply issues reducing procurement will make continued revenue growth a challenge. In addition to consumer electronic products, global industry leaders are focused on the positive development of server and data center products to maintain an expected revenue growth trend.

For more information on reports and market data from TrendForce’s Department of Semiconductor Research, please click here, or email Ms. Latte Chung from the Sales Department at lattechung@trendforce.com

TrendForce’s investigations show that, among the three categories in the upstream semiconductor supply chain, which consist of semiconductor manufacturing equipment, materials, and EDA, China made the most progress regarding self-sufficiency in semiconductor equipment, followed by materials, with EDA coming in last, in 2020. In other words, Chinese companies are relatively slow to develop EDA solutions.

The EDA market is relatively oligopolistic and involves two US companies. That means once the US implements more stringent controls over the export of EDA technologies and products to China, China’s development of semiconductor self-sufficiency will most likely suffer dire consequences as a result. Even if Chinese domestic companies are able to supply semiconductor equipment for mature process nodes as well as technologies for chip design, manufacturing, and packaging/testing, these things are essentially inoperable without EDA software and technical support. That is to say, the EDA industry remains the final piece of the puzzle for China’s quest for semiconductor self-sufficiency. Since China’s new IC policies (termed the Policies for Promoting the High-Quality Development of the Integrated Circuit Industry and the Software Industry in the New Era) place more emphasis on semiconductor equipment, materials, and software, compared to past policies, EDA (for which China’s self-sufficiency rate is lower than 10%) will likely become the top developmental priority within the software category in the new IC policies.

Chinese EDA suppliers are likely to provide domestic substitute solutions for mature process nodes

As the Chinese semiconductor design and manufacturing industries continue to expand, the Chinese EDA software market is expected to grow at a 15.1% CAGR across 2020-2024, which is faster than the global average of 10.3%. Although Synopsys, Cadence, and Siemens still account for an approximately 80% share in the Chinese EDA market, domestic companies in China have been accelerating their pace of development in recent years. For instance, companies that have more than 10 years of experience developing EDA software, including S2C, Empyrean, Primarius, Xpeedic, NineCube, and Cellixsoft, are gradually making waves in the industry, while many other emerging companies, such as X-EPIC, Arcas, LEDA, and AMEDAC have also been attracting more attention in the EDA market recently. Now that China-US trade tensions have yet to be resolved, and China continues to proceed with its new IC policies, Chinese EDA suppliers will likely experience rapid growth going forward, especially in their attempt to create domestic substitutes for 28nm and other mature process technologies.

（Image credit: Unsplash）

In view of the ongoing production capacity shortage in the semiconductor industry and the resultant price hike of chips, revenue of the top 10 IC design companies for 2Q21 reached US$29.8 billion, a 60.8% YoY increase, according to TrendForce‘s latest investigations. In particular, Taiwanese companies put up remarkable performances during this period, with both MediaTek and Novatek posting YoY growths of more than 95%. AMD, on the other hand, experienced a nearly 100% YoY revenue growth, the highest among the top 10.

TrendForce indicates that the ranking of the top five companies for 2Q21 remained unchanged from the previous quarter, although there were major changes in the 6th to 10th spots. More specifically, after finalizing its acquisition of Inphi, Marvell experienced a major revenue growth and leapfrogged Xilinx and Realtek in the rankings from 9th place in 1Q21 to 7th place in 2Q21.

Thanks to strong demand for major smartphone brands’ flagship and high-end 5G handsets, revenue leader Qualcomm’s processor and RF front-end businesses underwent remarkable growths, while its IoT business also benefitted from WFH and distance learning demands generated by the COVID-19 pandemic. Qualcomm’s revenue from its IoT business reached nearly US$1.4 billion, making IoT one of the major growth drivers for the company. For 2Q21, Qualcomm’s revenue reached US$6.47 billion, a 70.0% YoY increase. On the other hand, Nvidia’s revenues from gaming graphics cards and data center solutions each grew by 91.1% YoY and 46% YoY, respectively, in 2Q21. Strong demand from cryptocurrency miners for Nvidia’s high-end gaming graphics cards, along with the data center segment’s demand for Nvidia’s HPC products, propelled the company’s revenue for 2Q21 to US$5.84 billion, a 68.8% YoY growth, and secured the second place for Nvidia on the top 10 list.

Broadcom, which took third place on the top 10, attributed most of its revenue to wired connectivity and wireless products. Regarding wired connectivity products, the continued build-out of 5G base stations worldwide resulted in increasing demand for Broadcom’s high-speed Ethernet controller ICs, whereas for wireless products, the release of certain high-end 5G smartphones also created high demand for Broadcom’s Wi-Fi 6E chips. Similarly, Broadcom’s broadband and industrial solutions businesses both underwent double-digit growths in 2Q21, thereby driving the company’s revenue for 2Q21 to US$4.95 billion, a 19.2% YoY growth. Turning to AMD, the company’s revenue for 2Q21 reached US$3.85 billion, a staggering 99.3% YoY increase, owing to the following: first, the bullish gaming console market; second, massive earnings growths from enterprise, embedded, and semi-custom solutions; third, increased client adoption of AMD’s server CPUs (it should be noted that AMD’s server processor business grew by 183% YoY in 2Q21). AMD took fifth place in the top 10 list for 2Q21.

Regarding Taiwanese companies, MediaTek was able to sustain the momentum it gained in 1Q21 throughout 2Q21. MediaTek’s smartphone chip business, which generated the bulk of the company’s revenue, registered a 143% growth in 2Q21. At the same time, its revenues from other businesses also saw an overall double-digit growth. Hence, MediaTek posted a revenue of US$4.49 billion for 2Q21, a 98.8% YoY growth, and reached fourth place on the list. Finally, Novatek’s SoCs and display driver ICs both performed well in the market primarily due to its close partnerships with major foundries, including TSMC, UMC, and VIS. Revenue from display driver ICs, which had traditionally been Novatek’s primary revenue source, grew by 81% YoY in 2Q21.

Certain rumors in the end-devices markets indicate that demand will likely undergo a slowdown in 3Q21 and lead to decreased orders for certain components. However, given that foundries’ newly installed wafer capacities have yet to kick off mass production, the ongoing chip shortage is expected to persist for now. In addition, as some IC design companies’ client orders still remain unfulfilled, these companies’ revenues will likely experience further growths in 2H21, albeit to a relatively limited extent. It should also be pointed out that Marvell is expected to benefit from Inphi’s earnings for the next two quarters and increase its own revenue by more than 50% YoY in 2H21. Even so, Novatek’s sixth-place ranking is unlikely to be threatened by Marvell in the short run since Novatek will continue to benefit from the ongoing chip shortage and price hikes for the time being.

For more information on reports and market data from TrendForce’s Department of Semiconductor Research, please click here, or email Ms. Latte Chung from the Sales Department at lattechung@trendforce.com

In recent years, notebook computer (laptop) brands and processor suppliers alike have been actively adjusting their product strategies and business operations in response to behavioral shifts in the way consumers purchase and use computing devices. While notebook brands jostle for superiority in industrial design with improvements to their product appearances every year, competition in the processor industry has been even fiercer. TrendForce’s investigations indicate that the current competitive landscape in the processor industry consists of three developments, indicated below:

First, competition between AMD and Intel. Not only are both companies focused on expanding their respective ecosystems, but they have also been aiming to conquer the gaming market by releasing new products aimed at gamers this year. Apart from making headways in the PC processor market, AMD has introduced the AMD Advantage Design Framework.

AMD Advantage gaming notebooks are certified to meet standards of performance set by the company. AMD hopes that this certification system will allow it to generate a more consolidated gaming ecosystem while raising its brand equity. Intel, on the other hand, has been cultivating its presence in the creator and 5G notebook markets in an attempt to become the primary driver of digital transformation in the post-pandemic era.

Second, the Nvidia-Arm collaboration. This collaboration took place for the purpose of establishing an AI-enabled reference platform for notebook computers. More specifically, Arm’s CPU/NPU/GPU product stack delivers such wide-ranging AI solutions as real-time recognition, vibration detection, and keyword spotting. Following Arm’s successful foray into the PC segment, Nvidia will speed up its release of notebook products, including CPUs based on the Arm architecture.

Third, Qualcomm’s cross-sector ambitions. By architecting always connected notebooks* with Microsoft and Google, Qualcomm is now leveraging its advantages in 5G technology to prepare for upcoming competition with Intel in the 5G services market.

As the aforementioned companies’ presentations at Computex 2021 would suggest, not only do these processor suppliers possess their own competitive technological advantages, but they also share the common goal of upgrading their gaming competencies, including graphics cards, graphics technologies, and cooling performances.

Some of their current offerings aimed at the gaming market include the AMD RX 6000M, Nvidia RTX 3080 Ti/RTX 3070 Ti GPU, and Intel 11^th Gen Core H45. Interestingly, the AMD Advantage Design Framework, which certifies OEMs’ gaming notebooks based on the AMD platform, represents the company’s intention to challenge Nvidia’s dominance in the gaming market.

After Nvidia announced its US$40 billion acquisition of Arm last September, the partnership is expected to yield considerable technological synergies by way of the two companies’ AI collaboration. TrendForce believes that, in the long term, Arm Cortex CPUs based on the Armv9 architecture will allow Nvidia to break free from the dominance of Intel and AMD in the notebook CPU market. In particular, Nvidia will be able to cultivate its presence in the high-performance notebook market by combining its existing graphics technology with Arm Cortex CPUs.

Qualcomm’s main impetus for entering the notebook market can be attributed to the fact that the pandemic has brought about a new normal in which consumer adherence to notebook products has become increasingly strong. On the whole, Qualcomm’s cross-sector ambition appears to be on the cusp of victory, given the company’s preexisting 5G competencies and its experience in always-connected applications, advanced camera technologies, immersive audio/visual and display experiences, AI acceleration, and power efficiency for smartphones. As a case in point, Qualcomm is set to release Windows on Snapdragon notebooks as its own 5G *always connected PC platform.

It should be noted that Intel has also adopted MediaTek’s 5G chip technology in 5G connected notebooks featuring “Intel 5G Solution 5000”. On the other hand, Qualcomm is also developing mobile processors aimed at the entry-level always connected 4G/5G notebook market. TrendForce expects competition in the always connected market to generate a fresh wave of replacement demand in the mobile computing market.

*Always connected laptops (notebooks): notebooks that feature modem chips and have a constant internet connection much like smartphones. These notebooks can connect to the internet using 4G/5G networks without the need for Wi-Fi.

（Cover image source: Pixabay）