By Nick Flaherty www.flaherty.co.uk
This year has seen a staggering consolidation within the semiconductor industry. With deals ranging from the merger of NXP and Freescale through Broadcom and Avago to Qualcomm and CSR, Infineon and International Rectifier and Intel absorbing Altera (which completed today), the field of suppliers in the embedded industry will change significantly by the end of next year as a result.
Other deals are continuing, with Dialog Semiconductor's acquisition of Atmel still in play, and TDK taking over Micronas.
This is highlighted in the recent figures from market researcher IC Insight. Bill McClean sees the integrated device makers (IDM) overtaking the fabless chip makers briefly, partly as a result of the mergers and partly from currency fluctuations. But it does shake up the list of the top suppliers considerably.
As shown in Figure 1, only three of the top-10 IDM semiconductor suppliers are forecast to register growth in 2015 and, in total, the top-10 IDMs are expected to display flat growth this year. says McClean. Intel remains the dominant player, and Altera's $460m fabless business will barely make a bump in the figures as the new Programmable Solutions division. The combined NXP/Freescale is now moving up to challenge Texas Instruments, although the majority of the NXP basis is moving to fabless rather than IDM.
|Top 10 IDMs for 2015 post merger. Source: IC Insights
|Figure 2: Fabless semiconductor vendors are seeing the effects of consolidation more strongly than IDMs. Source: IC Insights
As shown, the top-10 fabless semiconductor suppliers are forecast to register a 5% decline in sales this year, five points worse than the top-10 IDMs. It should be noted that essentially all of the decline expected for the top-10 fabless suppliers in 2015 could be attributed to the forecasted decline in Qualcomm/CSR’s sales this year, which comes from Samsung’s increasing use of its internally developed Exynos application processor in its smartphones instead of the application processors it had previously sourced from Qualcomm.
|Figure 3: Flat growth in 2015 shows the semiconductor market moving into its negative cycle, with consequences for the embedded market. Source: IC Insights