Top Semiconductor Manufacturing Companies to Watch in 2023
The semiconductor industry is at the heart of modern technology, powering everything from smartphones to advanced AI systems. As we move through 2023, several companies stand out for their innovation, growth, and influence in the market. These companies are not just shaping the future of tech but also presenting exciting opportunities for investors.
Key Takeaways
- Semiconductors are crucial for modern technology, enabling advancements in various industries.
- Top companies in the semiconductor sector include Samsung, TSMC, NVIDIA, Intel, and Broadcom.
- The CHIPS and Science Act is boosting U.S. semiconductor manufacturing and research.
- Investing in semiconductor companies can offer significant returns due to their role in emerging tech trends.
- Global semiconductor sales are expected to reach $588 billion in 2024.
1. Samsung
Samsung Electronics is a giant in the semiconductor industry. Samsung invested approximately $17 billion to build a new semiconductor manufacturing facility in Taylor, Texas, spurred on by the Chips and Science Act. This new plant is expected to boost their production capacity significantly.
Samsung is not just about consumer electronics; they also make business appliances, health and medical equipment, and robotics. Their revenue for the trailing twelve months (TTM) is $202.2 billion, with a net income of $14.9 billion. The company’s market cap stands at $275.8 billion, and they have a one-year trailing total return of 16.34%.
During the Samsung Foundry Forum U.S., held at their Device Solutions America headquarters in San Jose, California, Samsung showcased their latest innovations in foundry services and their vision for AI. This event highlights Samsung’s commitment to staying at the forefront of technology.
Samsung’s semiconductor solutions are used in various technologies, from data centers and automotive to mobile and wearable devices. They manufacture these chips using their in-house foundry, Samsung Foundry.
2. TSMC
Taiwan Semiconductor Manufacturing Company (TSMC) is the largest semiconductor foundry in the world, producing 60% of the world’s semiconductors and 90% of the most advanced chips. TSMC continues to advance semiconductor manufacturing technologies and services, enabling customers to unleash more than 11,895 chip innovations in 2023.
TSMC’s expertise in chip manufacturing processes can be applied to various semiconductor applications, making it not reliant on any one specific use case. This flexibility drives demand for its manufacturing capacity.
The Biden Administration announced that TSMC would receive $6.6 billion in federal grants. With these funds, TSMC plans to invest another $25 billion to expand operations in Arizona, bringing the total number of TSMC facilities in the state to three.
TSMC specializes in contracting out its fabrication process, which has enabled the company to enjoy the recent boom in AI chip demand. AI-related revenue is expected to grow for TSMC at an annual rate of 50% over the next five years, reaching 20% of its total business by 2028.
TSMC’s ongoing attention in Japan might indicate its future global expansion plans. TSMC just built one plant and is moving forward with a second plant in Kyushu, partnering with Sony and Toyota for these facilities, with a total investment expected to reach over $20 billion.
3. NVIDIA
NVIDIA, headquartered in Santa Clara, California, is a leading name in the gaming hardware and AI industry. The company is renowned for creating the first GPU chip in 1999, which revolutionized graphics processing. Today, NVIDIA’s GPUs are essential for high-end performance in gaming, computer-aided design, and various other fields.
In the first quarter ending April 28, 2024, NVIDIA reported revenue of $26.0 billion, marking an 18% increase from the previous quarter and a staggering 262% rise from the same period last year. This impressive growth highlights NVIDIA’s strong market position and its ability to capitalize on emerging technologies.
NVIDIA’s solutions are widely used across multiple industries, including architecture, cybersecurity, robotics, and game development. The company’s commitment to innovation has made it a key player in AI, autonomous driving, data centers, and blockchain technologies.
With a market cap of $3.35 trillion, NVIDIA is one of the most valuable companies globally. Its revenue for the trailing twelve months (TTM) stands at $79.8 billion, with a net income of $42.6 billion. The company’s one-year trailing total return is an impressive 217.7%, reflecting its robust financial health and growth potential.
4. Intel
Founded in 1968, Intel has grown into one of the largest semiconductor companies in the world. With over 100,000 employees in 65 countries, Intel produces a wide range of chips, including CPUs, GPUs, SOCs, and flash memory. Intel’s flagship Intel Core family of CPUs is widely used by major computer manufacturers like Dell.
Intel’s products are used in various sectors such as hospitality, retail, sports, healthcare, financial services, and transportation. Their lineup includes Intel Core and Xeon chips, chipsets for mobile, desktop, server, and embedded use, as well as graphics processing units, single- and multi-node servers, server chassis and boards, FPGAs, and programmable devices.
The company primarily develops processors for the PC and enterprise server markets. The Client Computing Group segment supplies PC processors, while the Data Center Group segment serves enterprise customers, including cloud service providers. Other segments include IoT products for retail, industrial, and healthcare markets, memory and storage products, autonomous driving technology, and programmable semiconductors.
In March, Intel received $8.5 billion in subsidies and $11 billion in loans through the CHIPS Act. This funding will be used to build two new fabs in Arizona and two more in Ohio, aiming to create a new manufacturing hub. All four fabs will produce leading-edge nodes.
Revenue
| Rank | Company | 2023 Revenue | % of Industry Revenue |
|---|---|---|---|
| 1 | Intel | $51B | 9.4% |
| 2 | NVIDIA | $49B | 9.0% |
| 3 | Samsung | $44B | 8.1% |
| 4 | Qualcomm | $31B | 5.7% |
| 5 | Broadcom | $28B | 5.2% |
5. Broadcom
Broadcom, a multinational corporation based in Silicon Valley, is a fabless designer with a wide range of semiconductor products. The company’s portfolio includes Ethernet switch ICs, network adapters, RAID controllers, and other devices used by high-profile customers like IBM, Dell, Motorola, and Nintendo. In 2023, Broadcom finalized a multibillion-dollar deal with Apple to provide 5G radio frequency components, film bulk acoustic resonator filters, and wireless connectivity parts for Apple’s devices.
Broadcom designs, develops, and supplies semiconductor technology and infrastructure software solutions. Their products cover enterprise storage, networking, and communications use cases. The company’s line of products includes storage adapters, wireless embedded solutions, RF components, processors, custom silicon devices, and motion control encoders, helping power massive businesses across various industries.
Broadcom’s revenue in 2023 was $36 billion, and the company employs around 20,000 people. Headquartered in Palo Alto, CA, Broadcom operates as a fabless company, meaning it outsources its manufacturing. The company also offers AI chips that focus on overcoming networking challenges involved in moving large amounts of data. Additionally, Broadcom makes chips for smartphones, broadband access, and data storage.
Aside from its latest AI products, Broadcom’s software arm recently acquired VMWare, which strengthens its position in virtualization and mainframe software, complementing its security software offerings.
6. Qualcomm
Qualcomm is a global semiconductor and telecommunications company that designs and markets wireless communications products and services. Telecommunications companies worldwide use Qualcomm’s code division multiple access technology, which has played an important role in the development of wireless communications. Its Snapdragon chipsets are found in many mobile devices.
Qualcomm makes semiconductors and components for a variety of industries. The company has had a notable impact on mobile and smartphone applications with its Snapdragon 5G platform. Qualcomm also offers a semiconductor mentorship program where it works with startups in India to refine their semiconductor products.
Qualcomm long ago made a name for itself as a supplier of chips for premium smartphones, a trend Newman says should continue to benefit the company as the devices incorporate more AI technologies.
In addition, Qualcomm also stands to gain as an increasing number of AI-powered PCs hit the market.
7. Applied Materials
Applied Materials is a key player in the semiconductor industry, providing essential equipment, services, and software for chip manufacturing. The company is crucial in the global chipmaking ecosystem, with major clients like TSMC, Intel, and Samsung. Applied Materials’ technology is vital for making high-quality silicon wafers and depositing tiny circuits on them.
The company is based in Santa Clara, California, and has a significant impact on the electronics industry, supplying materials for products like iPhones, TVs, and cars. They are also investing in digital infrastructure to speed up product development cycles.
Financial Performance
- Revenue (2023): $26.5 billion
- Net income (2023): $7.3 billion
- Market cap: $205.2 billion
- One-year trailing total return: 79.8%
Recent Developments
Last year, Applied Materials faced a criminal investigation by the U.S. Justice Department for allegedly violating export controls. The company was accused of shipping fabrication equipment worth hundreds of millions of dollars to China’s largest chipmaker, SMIC.
8. ASML
ASML, based in the Netherlands, is a global leader in the semiconductor industry. The company specializes in creating advanced lithography systems, which are essential for chip manufacturers. These machines use light to print intricate patterns on silicon wafers, a process known as extreme-ultraviolet (EUV) photolithography. ASML is the only company that has mastered this complex technology and offers it commercially.
ASML’s financial performance is impressive:
| Metric | Value |
|---|---|
| Revenue (TTM) | $28.3 billion |
| Net Income (TTM) | $7.7 billion |
| Market Cap | $418.8 billion |
| One-Year Trailing Total Return | 48.3% |
The company is also expanding its presence in South Korea, adding to its existing four sites. This move is part of ASML’s strategy to diversify geographically, especially given the ongoing trade tensions between the U.S. and China.
ASML continues to make significant impacts with its customers, suppliers, and other key stakeholders, as highlighted in their recent press releases and announcements.
9. AMD
Advanced Micro Devices (AMD) is a major player in the semiconductor industry, known for its computer processing units (CPUs) and graphic processing units (GPUs). AMD has been a fierce competitor to Intel since the 1960s. The company is headquartered in Santa Clara, CA, and employs around 26,000 people.
Key Financials
| Metric | Value |
|---|---|
| Revenue (2023) | $23 billion |
| Net Income (TTM) | $1.1 billion |
| Market Cap | $249.9 billion |
| One-Year Trailing Total Return | 28.8% |
Business Model
AMD is a fabless company, meaning it outsources its manufacturing to external firms. This allows AMD to focus on designing cutting-edge chips while leveraging the production capabilities of specialized manufacturers.
Recent Innovations
In 2016, AMD launched the Ryzen family of microprocessors, which featured a completely new chip architecture. This move helped AMD regain market share from Intel. More recently, AMD has entered the competitive AI chip market with its MI300X line of GPUs.
10. Apple
Apple, a tech giant known for its innovative products, is also a significant player in the semiconductor industry. Apple’s influence in the tech world is undeniable. The company has been making strides in developing its own chips, reducing its reliance on third-party suppliers.
Apple’s M-series chips, like the M1 and M2, have set new standards in performance and efficiency. These chips are designed in-house and manufactured by TSMC, showcasing Apple’s commitment to vertical integration. As TSMC reportedly plans to enter 2nm trial production next week for Apple’s M5 chip, the company’s target for 2nm to enter mass production in 2025 would be on track.
Financial Performance
Apple’s semiconductor segment has shown impressive growth. In 2023, Apple generated $19 billion in revenue from its semiconductor business, accounting for 3.4% of the industry’s total revenue.
| Rank | Company | 2023 Revenue | % of Industry Revenue |
|---|---|---|---|
| 1 | Intel | $51B | 9.4% |
| 2 | NVIDIA | $49B | 9.0% |
| 3 | Samsung | $44B | 8.1% |
| 8 | Apple | $19B | 3.4% |
Future Prospects
Apple’s future in the semiconductor industry looks promising. The company’s focus on developing advanced chips and its partnership with TSMC for cutting-edge manufacturing processes position it well for continued success. With the anticipated launch of the M5 chip, Apple is set to further solidify its place in the semiconductor market.
Conclusion
As we look ahead to 2023, the semiconductor industry continues to be a cornerstone of technological progress. Companies like Samsung, TSMC, NVIDIA, Intel, and others are not just advancing their own capabilities but are also driving innovation across various sectors. From AI and data centers to everyday consumer electronics, the impact of these semiconductor giants is far-reaching. With ongoing advancements and significant investments, the future looks promising for both the industry and its investors. Keeping an eye on these top players will be crucial for anyone interested in the tech landscape.
Frequently Asked Questions
What are semiconductors used for?
Semiconductors are used in many devices like computers, smartphones, and medical equipment. They help these devices to work and respond to commands.
Why are semiconductor companies important?
Semiconductor companies are important because they drive tech trends in areas like AI, data centers, and cybersecurity. They make the chips that power our modern devices.
What is the CHIPS and Science Act?
The CHIPS and Science Act is a law signed in August 2022 to boost U.S. semiconductor manufacturing and research. It provides funding and tax credits to help the industry grow.
Which companies are top in semiconductor manufacturing?
Some of the top semiconductor companies are Samsung, TSMC, NVIDIA, Intel, Broadcom, Qualcomm, Applied Materials, ASML, AMD, and Apple.
How does the semiconductor industry impact the economy?
The semiconductor industry impacts the economy by creating jobs, driving innovation, and supporting other industries like tech and healthcare. It is vital for modern technology.
What trends are shaping the semiconductor industry?
Trends like the expansion of IoT (Internet of Things) and the development of AI (Artificial Intelligence) are driving the demand for semiconductors. These trends are critical for future tech applications.
