Wireless propels Qualcomm into semiconductor top five

Qualcomm may be having supply problems for its newest chips, but the strength of its wireless offering is highlighted by the first quarter league tables for the semiconductor industry. The US firm was the only vendor in the top 10 who managed year-on-year growth in chip sales in Q112.

That took Qualcomm into the overall semiconductor top five, with a 56% growth in chip sales to a total of $3.06bn. It overtook Texas Instruments to enter the top rank, behind Intel, Samsung, foundry TSMC (which makes Qualcomm's chips), and Toshiba.

According to IC Insights' calculations, only three top 20 silicon suppliers achieved year-on-year growth in the quarter. Apart from Qualcomm, the others were Broadcom, in eleventh place with a 1% rise on Q111, and Fujitsu, which saw a 6% revenue growth and took fifteenth position. Intel, Sony, NXP and Nvidia were flat year-on-year while all the others experienced decline, most dramatically ST and Freescale, both down by over 20%.

Part of Qualcomm's trend-bucking performance was attributable to its acquisition of Atheros, which closed in the second quarter last year and helped propel its new parent into the top five, only three years after it entered the top 10 for the first time in 2008 - the first fabless chip vendor ever to do so. For the full year, however, it remained in seventh place (or sixth according to Gartner, which excludes foundries from its rankings). If the three main foundries were excluded from IC Insights' survey, Sharp, Marvell and Rohm would enter the top 20.

Apart from the Atheros purchase, the main factor for Qualcomm was smartphone growth, and the rising hold the firm has on that market. Samsung has also seen strong recent growth in smartphones, largely because its own handset unit is a huge customer, but overall its chip business suffered a 14% decline, afflicted by the shrinkage in the memory market. All the top four memory vendors saw year-on-year revenue drops, Samsung and SK Hynix in double digits.

In total, sales for the top 20 chip suppliers totaled $52.28bn in the first quarter, down 4% on Q111, and IC Insights is predicting that the overall chip market will grow by 6% in full year 2012, with higher growth to come next year. Wireless will be an important driver of those trends.

Despite the depression in the memory sector, smartphones and tablets will drive major growth in the mobile memory chip market, sparking a 6% revenue rise this year, according to IHS iSuppli. Revenue for mobile memory is projected to reach $14.9bn this year, spanning NAND and NOR flash memory, NAND-based embedded multimedia cards (eMMC), and mobile DRAM. A higher 9% increase is anticipated in 2013 and by 2015, mobile memory revenue will peak at $17.9bn, say the analysts. "The mobile space has been the engine for overall memory growth in the last few years, and it continues to shape and define the success of suppliers participating in the memory market," said senior principal analyst Michael Yang.