Propelled by 51% share of IDM sales and 65% share of fabless sales, U.S. companies captured 55% of the total worldwide IC market in 2019, according to semiconductor research firm IC Insights.
Regional marketshare of IDMs (companies operating wafer fabs), fabless companies, and total IC sales were led by U.S.-headquartered companies in 2019, according to data presented in the recently released March Update to The McClean Report 2020.
U.S. companies held 55% of the total worldwide IC market in 2019 followed by the South Korean companies with a 21% share, down six percentage points from 2018. Taiwanese companies, on the strength of their fabless company IC sales, held 6% of total IC sales, one point less than the European companies. South Korean and Japanese companies have an extremely weak presence in the fabless IC segment and the Taiwanese and Chinese companies have a noticeably low share of the IDM portion of the IC market. Overall, U.S.-headquartered companies showed the most balance with regard to IDM, fabless, and total IC industry marketshare.
Driven by a collapse in DRAM and NAND flash memory IC sales in 2019, the South Korean-headquartered companies, primarily Samsung and SK Hynix, registered a 32% sales drop, the worst of any major country/region.
Interestingly, the South Korean companies logged the largest increase in sales in 2018 at 26%. However, with the memory market expected to show a rebound in 2020, it would not be surprising to see the South Korean companies go from “first to worst” regarding IC sales growth by company headquarters location this year as compared to last year. The Chinese, European, Taiwanese, and U.S. companies declined at a lesser rate than the total IC industry (-15%) last year.
The fate of the 2020 IC industry remains uncertain. The recent surge of the spread of the coronavirus (Covid-19) and its anticipated negative impact on the global economy and IC market definitely fits the definition of a Black Swan, or unanticipated, event, according to IC Insights. Such events typically cause a great deal of uncertainty and that is certainly the case today.
Over a decade ago, Jeff Immelt, then-CEO of General Electric, coined the term “reset economy.” He used this phrase to describe what he expected to be a very different world following the financial meltdown and ensuing global economic crisis of 2008-2009.
Fast forward to 2020. IC Insights believes that this “reset” philosophy can be applied to the global IC industry this year following the current worldwide disruption to trade and business and the expected subsequent slowdown of the global economy due to the Covid-19 outbreak.
After enduring a steep market decline in 2019, most believed the IC industry was poised for a reasonably robust recovery in 2020. In fact, January 2020 global IC sales were up a solid 79% from one year earlier in January 2019. IC Insights had originally forecast an 8% increase for the 2020 IC market in its McClean Report 2020 that was released this past January.
However, with much of the industry based in the Asia-Pacific region — perhaps the most impacted region for the virus — the IC industry is now squarely in the crosshairs of being heavily impacted by Covid-19. IC Insights has had to step back and take a fresh look at its IC market forecast as it stands today and assess what can be expected for 2020.