US entity list hit fabless chip vendors in 2019

March 19, 2020 // By Peter Clarke
US entity list hit fabless chip vendors in 2019
The combined revenues of the top ten fabless chip companies in 2019 declined by 4.1 percent compared with 2018, partly due pressures not to sell to China, according to TrendForce.

However, this was in an overall market that was down 12.1 percent on 2018 so the fabless market did better than integrated device manufacturers (IDMs). In 2020 the fabless sector is likely to decline again because of a global recession caused by the Covid-19 pandemic, the market analysis firm said.

The top ten was characterized by US losers at the top of the list and some US and Taiwanese winners lower down.

Revenues at the top three fabless chip companies – Broadcom, Qualcomm and Nvidia – all declined by around 10 percent while the next three – MediaTek, AMD and Xilinx all grew. The largest growth was achieved by lower ranked Taiwanese fabless Novatek and Realtek.

Top ten fabless semiconductor vendors ranked by 2019 revenue. Source: TrendForce.

Novatek makes TDDI solutions and AMOLED driver chips for China's smartphone suppliers. Realtek makes communications network ICs, computer peripheral ICs and multimedia ICs. Realtek is a leader in the true wireless stereo (TWS) market and is also doing well on the rise of WiFi-6 deployments.

Market leaders Broadcom and Qualcomm were affected by the US entity list policy and Qualcomm faced competition from HiSilicon within Huawei, MediaTek and China's Unisoc.

Huawei saw strong sales of its smartphones, with their Kirin SoCs, in the 1H19, which hurt the performance of other smartphone brands and thereby hurt Qualcomm. Qualcomm registered an 11 percent decrease YoY in terms of revenue.

Nvidia's problems were excess numbers of graphics cards in the supply chain for the first three quarters of 2019. Although inventory levels returned to normal in 4Q19 Nvidia's overall 2019 revenue was down by 9 percent.

The US successes were AMD which is doing well in competition with Intel and Xilinx which is prospering on the back of 5G infrastructure and industrial automation design wins. Xilinx was affected by the entity listing in 4Q19

With regard to 2020 the Covid-19 pandemic is a global threat that

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