Chip designers made bank in 2021 amid global shortage

Absolutely Fabless: A good year for those who don't make the things themselves

2021 was a fabulous year for the largest global fabless chip designers, thanks to ongoing global chip shortage that caused silicon prices to spike, according to a new report from TrendForce.

The world's 10 biggest fabless chip designers grew their collective revenue to $127.4 billion in 2021, a 48 percent increase over the previous year, said TrendForce's Thursday report, which compiled public revenue disclosures from chip designers that don't have their own manufacturing operations.

Various dynamics led to a shuffling of 2021's rankings from 2020, with Nvidia taking the No. 2 spot from Broadcom, Taiwanese firms Novatek and Realtek rising to sixth and eighth place, respectively, and Himax moving into the No. 10 spot thanks to Dialog Semiconductor getting acquired by chip manufacturer Renesas Electronics.

San Diego, California-based Qualcomm maintained its No. 1 rank, growing revenue 51 percent to $29.3 billion. This was mainly thanks to sales of chips for mobile phones and IoT growing 51 percent and 63 percent year-over-year respectively. It also got an important boost from its radio frequency and automotive chip business. TrendForce only counted revenue from its Qualcomm Technologies division.

Santa Clara, California-based Nvidia soared into second place, growing 61 percent to $24.8 billion. The largest factors were its graphics cards for gaming and data center products, which grew 64 percent and 59 percent, respectively. TrendForce did not include Nvidia's OEM or intellectual property revenue.

In third place, San Jose, California-based Broadcom's revenue grew at the slowest rate of those on the list, by only 18 percent, which brought its revenue to $21 billion. This growth was lifted by its chips for networks, broadband communication and storage. TrendForce only counted revenue from Broadcom's semiconductor division.

The fourth largest fabless chip designer in 2021 by sales was Taiwan-based MediaTek, which grew 61 percent to $17.6 billion on the strength of mobile phone chip sales that benefited from 5G's growing popularity.

Behind MediaTek was Santa Clara, California-based AMD, which maintained its rank at No. 5. The company's revenue grew 68 percent to $16.4 billion, driven by strong sales of its Ryzen CPUs and Radeon GPUs as well as the company's growing business in the cloud and data centers. AMD's semi-custom division has also benefited, largely thanks to the success of Sony's PlayStation 5 and Microsoft's latest Xbox consoles.

The remaining five chip designers on the list performed as follows:

6. Taiwan-based Novatek grew 79 percent to $4.8 billion
7. Santa Clara, California-based Marvell grew 46 percent to $4.2 billion
8. Taiwan-based Realtek grew 43 percent to $3.7 billion
9. San Jose, California-based Xilinx grew 20 percent to $3.6 billion
10. Taiwan-based Himax grew 74 percent to $1.5 billion

With AMD completing its acquisition of Xilinx in February, 2022's ranking is already set for another disruption, and TrendForce said while fabless chip designer revenue is expected to continue growing this year, it does expect a correction of sorts.

TrendForce said growth drivers in 2022 for chip designers will include high-performance computing, servers, automotive, network communication, high-speed transmission and industrial applications.

"However, terminal system manufacturers face the correction of component mismatch issues. In addition, growing foundry costs, intensifying geopolitical conflicts, and rising inflation will all be detrimental to global economic growth and may impact an already weakened consumer electronics market," wrote Galen Tseng of TrendForce.

"These are the challenges [chip] design companies face in 2022 and by what means can product sales momentum be maintained within existing production capacity, [research and development] efficacy strengthened, and chip specifications upgraded, will become the primary focus of development in 2022," he added. ®