Semiconductor chip design biz grew 32% in 2 Q 2022, difficulties ahead in 2H22

Date: 19/09/2022
From its latest study on the global semiconductor chip design industry, market researcher TrendForce finds total revenue of the top ten global VLSI semiconductor IC chip design houses reached US$39.56 billion in second quarter of 2022, a growth of 32% year over year. The broad areas of demand for chips include AI driven data centers, high-speed networking, IoT chips, and any other high-end processor intensive semiconductors. AMD is leading in growth-rate through inorganic as well as organic growth, where TrendForce ranks AMD in top place with the highest annual revenue growth rate of 70% in second quarter of 2022. The number one FPGA vendor Xilinx is now part of AMD. AMD increased its embedded division revenue by 2,228% YoY. In the data center application area AMD generated a revenue of US$6.55 billion, a 70% growth year over year, highest amongst the top ten.

The other findings shared by the TrendForce includes:

The number one ranked big chip design powerhouse Qualcomm recorded 45% revenue growth year over year to reach US dollar 9.8 billion. Qualcomm is not only an mobile phone SOC chip designer, it has forayed littlemore deeper into automotive, and IoT domains. However Qualcomm is slowly losing its share in low end mobile phone SOC chip area.

GPU focused NVIDIA increased its market share from 50% mark to 53.5%, making up for the 13% YoY slump in its game application business, bringing total revenue to US$7.09 billion, though annual growth rate slowed to 21%.

Broadcom continue to grow strongly in the areas of cloud services, data centers, and networking. The company’s purchase order backlog is still increasing with 2Q22 revenue reaching US$6.49 billion, an annual growth rate of 31%.

Taiwanese number one semiconductor chip design major MediaTek continue to strengthen its position in mobile phone, smart edge, and power IC sectors but seen a drop in sales of chips due to lesser buying from Chinese-branded mobile phones. Company generated a revenue of US$5.29 billion, an 18% year over year growth.
The sales revenue of display driver IC designer Novatek fell to US$1.07 billion, down by 12% year over year.

Networking semiconductor IC designer Realtek seen a good 12% growth in revenue of US$1.04 billion in second quarter of 2022. however this company could feel the weaknesses in consumer and computer segments.

Another leading SoC designer Marvell's second quarter 2022 revenue increased by 50% to reach US$1.49 billion. Where as Will Semiconductor's chip design business's total revenue fell to US$690 million, a 16% drop YoY.

Synaptics is back in to top 10, where its product portfolio covering automotive TDDI, Wireless Devices, VR, and Video Interface, pushing IoT businesses generating revenue US$480 million, an excellent growth of 45%.

TrendForce alerts "due to overall economic uncertainty and poor consumer electronics market conditions, growth rates have slowed significantly and high inventory levels have gradually accumulated. Moving into 2H22, downstream inventory has not been effectively eliminated. IC design houses will have difficulties maintaining revenue growth due to a high preceding base period and poor market conditions. Consumer IC products also need several quarters to regulate day sales of inventory and carry out destocking. The annual growth rate of inventory must guard against again widening the gap with the annual growth rate of revenue and this will become a challenge for IC design houses testing their strategies for new product development, production planning, and product sales."

Author: Srinivasa Reddy N
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