It’s the tough times that separate the weak from the strong and 2009 was tough enough to buckle the knees of the most stalwart. Given that semiconductor industry revenue dropped by about 10-11% in 2009, it’s interesting to look at how the top fabless semiconductor companies faired. This article from Semiconductor International lists the results from 2009. It’s a little premature, as many of the 4th quarter results aren’t fully out yet, but it’s a pretty good snapshot. Given the 10-11% average drop it’s logical that the average for the top 25 was significantly less, about 5%. However, even in this group there was a considerable spread.
Top 25 Fabless Semiconductor Companies by 2009 Revenue
Looking at the table a few things standout. First, it’s interesting to separate the list by country of origin. As there is only one company from each of Japan and Europe, it hard to conclude anything on average except that neither region has embraced the fabless model. Note, however, the stark difference between the results in the U.S. and in Taiwan. The average decline for a U.S. based company in the top 25 was 8.7%, pretty close to the industry average. A company in Taiwan in the top 25, on the other hand, grew an average of 13%!!
As, or maybe more interesting, is to look at how the companies did against their regional average. Seven companies beat the regional average in the U.S.: Atheros, Silicon Labs, Qualcomm, Avago, PMC-Sierra, Broadcom and Semtech. Is there any doubt that that list represents the “cream of the crop” of fabless IC companies. More unique, however, is that two U.S. companies managed significant growth in this environment. Congratulations to Atheros and Silicon Labs, among my most admired companies in the fab-less industry.
But let’s turn attention to Taiwan. With the regional average being 13% growth, these companies are operating in a different (more condusive to growth?) environment. Within that environment, three companies beat that average, Mstar, Mediatek and Realtek. These names have and should strike fear in the management of U.S. based companies. These companies continue to grow on a business model focused on cost based design for volume applications. They make strong ties to local foundries and easily capture design wins with local ODMs. Given that TSMC is destined to become the 2nd largest semiconductor company in the world in just a few years we are only going to see the strengths of Taiwan based companies increase. U.S. management and investors, take note …
Top 25 Fabless Semiconductor Separate by Country and Sort by 2009 Growth
Tags: Altera, atheros, fabless semiconductor, growth, linkedin, Mediatek, Mstar, Realtek, silicon labs