China #3 in Fabless IC Sales Ranking

Article By : Alan Patterson

U.S. fabless IC sales ranks on top, Taiwan number two, China grows to claim surpass European players

TAIPEI — China has grown in the rankings to become the third largest nation in the fabless segment with about a 10th of global sales in 2017, according to market research firm IC Insights.

Since 2010, Chinese suppliers accounted for the largest increase in fabless market share, rising to 11 percent of total chip design sales in 2017 from 5 percent in 2010, according to the IC Insights report.

Ten Chinese companies entered the top-50 fabless IC supplier list in 2017 compared with one in 2009, according to the report. Government-funded Unigroup was the largest Chinese fabless IC supplier and the ninth-largest worldwide in 2017 with sales of $2.1 billion, IC Insights said. 

The chip design segment is showing strength. Fabless companies increased their share of global chip sales to 27 percent in 2017 from 18 percent in 2007, according to the report. 

IC Sales by fabless companies in 2017

U.S. companies are hanging on to their No. 1 position in the fabless business, with 53 percent of chip-design sales last year, although their share slipped from 69 percent in 2010, the report said. This was due in part to the acquisition of U.S.-based Broadcom by Singapore-based Avago. When Broadcom moves its headquarters to the U.S., IC Insights predicted that the U.S. share of the fabless business will again return to 69 percent.

Taiwan maintained its No. 2 position in the fabless market with a 16 percent share of total chip-design sales in 2017, about the same percentage that it held in 2010, the report said.  The island’s MediaTek, Novatek, and Realtek each had more than $1 billion in IC sales last year, and each ranked among the world’s top-20 fabless IC companies.

European companies’ share of the fabless business slipped to 2 percent in 2017 from 4 percent in 2010. That loss was attributable to Qualcomm’s 2015 acquisition of U.K.-based CSR, the second-largest European fabless IC supplier, and Intel’s 2015 purchase of Germany-based Lantiq, the third-largest European fabless IC supplier. 

These acquisitions left U.K.-based Dialog, with $1.4 billion in sales in 2017, and Norway-based Nordic, with $236 million in sales in 2017, as the only two European-based fabless IC suppliers to make IC Insights’ list of top-50 fabless IC suppliers last year.

While Japan and South Korea have plenty of chip fabs, they are bit players in the fabless business. Megachips, which saw its 2017 sales jump by 40 percent to $640 million, was the largest Japan-based fabless IC supplier. The lone South Korean company among the top-50 largest fabless suppliers was Silicon Works, which had a 15 percent increase in sales last year to $605 million, according to IC Insights.

— Alan Patterson covers the semiconductor industry for EE Times. He is based in Taiwan.

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