Top Semiconductor Suppliers to Watch in 2023
The semiconductor industry is a cornerstone of modern technology, powering everything from smartphones to electric vehicles. As we navigate through 2023, certain companies stand out for their innovation, market performance, and resilience in a challenging economic environment. This article highlights the top semiconductor suppliers to watch in 2023, offering insights into their contributions and market strategies.
Key Takeaways
- Intel remains a leader in the semiconductor industry with significant revenue and a strong employee base.
- Nvidia has shown remarkable growth, especially in the areas of AI and graphics processing units.
- TSMC continues to dominate the foundry market, providing chips for major tech companies worldwide.
- AMD is making waves with its high-performance processors and competitive market strategies.
- Qualcomm remains a key player in the mobile semiconductor space, driving innovations in 5G technology.
1. Intel
Founded in 1968 as a manufacturer of logic circuits and memory chips, Intel has grown into one of the largest semiconductor firms in the world. The company, which has well over 100,000 employees and locations in 65 countries, produces a wide array of chips, including graphics processing units (GPUs), systems-on-a-chip (SOC), and flash memory. Intel’s line of central processing units (CPUs), all under the umbrella of the company’s flagship Intel Core family, are used by major manufacturers like Dell.
Recent Developments
This year, Intel is aiming to defend its data center market share against rivals with the recently launched fourth-generation Xeon Scalable processors. Additionally, Intel is taking a new swing at Nvidia and AMD with its new Intel Data Center GPU Max Series for high-performance computing and AI workloads. Another area to watch is Intel’s PC efforts, where the company will continue to push its new 13th-generation Core chips and Arc discrete graphics products.
Financial Performance
- Market Capitalisation: US$127.84 billion
- Stock Price (as of 03/05/2023): US$30.65
- Stake Platform Bought / Sold (1 Jan 2023 – 3 May 2023): 65% / 35%
Key Locations
- Hillsboro, Oregon
- Folsom, California
- Santa Clara, California
- Rio Rancho, New Mexico
2. Nvidia
Nvidia Corporation ($NVDA) is a US-based technology company that designs and manufactures high-performance graphics processing units (GPUs) and system-on-a-chip (SoC) units for use in gaming, professional visualization, and artificial intelligence (AI) applications. Nvidia operates globally and differentiates itself from its competitors through its focus on GPU-accelerated computing, its proprietary CUDA parallel computing platform, and its development of specialized AI chips such as the Tensor Core GPU.
Key Products and Innovations
- High-performance GPUs
- System-on-a-chip (SoC) units
- CUDA parallel computing platform
- Tensor Core GPU for AI applications
Market Position and Strategy
Nvidia’s GPUs are powerful processors ideal for generative AI, large language models (LLM), and machine learning. Tens of thousands of companies employing advanced computing and AI solutions are already using Nvidia’s leading-edge chips. The company employs a fabless business model, outsourcing chip manufacturing to other firms.
Recent Developments
In 2023, Nvidia aims to diversify beyond GPUs with a growing portfolio of commercial software, the forthcoming Grace server CPU, a broader set of server appliances, and an expanding family of networking products from its 2020 acquisition of Mellanox Technologies.
Challenges
Despite its stronghold in AI, Nvidia faces challenges such as limited growth due to U.S. restrictions on technological exports to China. The company is attempting to enter China’s market with chips that work around these restrictions, but competition from local players like Huawei remains a significant hurdle.
3. TSMC
Taiwan Semiconductor Manufacturing Company (TSMC) is a pivotal player in the semiconductor industry, known for its cutting-edge technology and significant global presence. TSMC is moving full speed ahead with its expansion plans, particularly in the United States and Japan.
Expansion in the United States
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. Apple has already booked out most of the chip capacity produced at TSMC’s Arizona location, making it a significant player in U.S. semiconductor goals and the broader economy.
Expansion in Japan
TSMC is also focusing on Japan for its future global expansion plans. The company has built one plant and is moving forward with a second plant in Kyushu, in partnership with Sony and Toyota. The total investment for these facilities is expected to reach over $20 billion.
Advanced Packaging Capacity
During 2023, TSMC faced bottlenecks in components used in artificial intelligence, particularly in its advanced packaging technology like chip-on-wafer-on-substrate (CoWoS). Despite the overall market decline, TSMC could not meet the high demand for advanced packing orders. However, TSMC has actively expanded its CoWoS production, stabilizing Nvidia’s GPU supply.
4. AMD
Advanced Micro Devices, Inc. ($AMD) is a US-based semiconductor company that produces a variety of microprocessors, graphics processors, and other specialised chips for use in personal computers, gaming consoles, and data centres. AMD operates globally and is characterised by its focus on providing high-performance chips at competitive prices, its emphasis on research and development to innovate new products, and its partnerships with other companies in the industry.
Market capitalisation: US$131.35b
Stock price (as of 03/05/2023): US$81.62
Revenue: $23 billion (2023)
Size: 26,000 employees
Headquarters: Santa Clara, CA
U.S. Fabs: Fabless
Key Developments
It’s been nearly six years since AMD reinvigorated its client CPU portfolio and re-entered the server chip market with the company’s game-changing Zen architecture. In that time, the Santa Clara, California-based chip designer has proven that it can firmly challenge Intel’s CPU dominance in PCs and servers while making inroads with GPUs and expanding to other product areas like adaptive system-on-chips (SoC) and data processing units (DPU) with its Xilinx and Pensando acquisitions.
Strategic Focus
This has built AMD into what CEO Lisa Su has called the “high-performance computing leader,” but now the company must keep executing as Intel plans a rebound and Nvidia fights to protect its AI crown. One major focus this year are AMD’s Ryzen 7000 processors for client PCs and fourth-generation EPYC server chips. At the same time, the company is seeking to make a bigger challenge against Nvidia with its upcoming Instinct MI300, which AMD claims will be the first data center processor to integrate a GPU and CPU on the same chip.
5. Broadcom
A multinational corporation headquartered in the heart of Silicon Valley, Broadcom primarily operates as a fabless designer with a broad and diversified range of semiconductor products. The company’s portfolio includes ethernet switch ICs, network adapters, RAID controllers, and other devices that are used by high-profile customers like IBM, Dell, Motorola, and Nintendo. In 2023, Broadcom finalized a multibillion dollar deal with Apple—for whom it has been a longstanding supplier—to provide 5G radio frequency components, film bulk acoustic resonator filters, and wireless connectivity parts for the company’s devices.
Broadcom is more than just a chip provider; it’s also a software company. Recently, it acquired the software company VMware for $610 million, which attracted the attention of the industry. The CEO of Broadcom said that the acquisition of VMware is transformative. In the 2024 fiscal year, Broadcom expects annual revenue to reach $500 million, and VMware will make a great contribution. Among them, revenue from artificial intelligence-related chips is expected to reach $10 billion this year.
Revenue and Market Position
- Revenue: $36 billion (2023)
- Size: 20,000 employees
- Headquarters: Palo Alto, CA
- U.S. Fabs: Fabless
- Production Node Range: N/A
Key Products and Innovations
Broadcom’s 6th place covers a wide range of businesses, including wired and wireless communication chips, enterprise and data center networking solutions, storage devices and system software, and various other applications and services. Last year, Broadcom was also a beneficiary of the AI boom. Broadcom’s network chips helped transmit large amounts of data needed for artificial intelligence calculations, and they all helped customers design customized artificial intelligence solutions.
Strategic Partnerships and Deals
In 2023, Broadcom’s revenue for fiscal year 2023 increased 8% year-on-year, to a record high of $35.8 billion, driven by hyperscale companies’ investment. Broadcom finalized a multibillion dollar deal with Apple to provide 5G radio frequency components, film bulk acoustic resonator filters, and wireless connectivity parts for the company’s devices.
6. Qualcomm
Qualcomm Incorporated ($QCOM) is a US-based semiconductor and telecommunications equipment company that produces chips and other hardware for use in smartphones, laptops, and other mobile devices. Qualcomm operates globally and is known for its focus on mobile computing and wireless technology, its extensive patent portfolio related to cellular technologies, and its partnerships with other companies in the industry.
Market Performance
- Market capitalisation: US$125.80b
- Stock price (as of 03/05/2023): US$112.83
- Stake platform bought / sold (1 Jan 2023 – 3 May 2023): 54% / 46%
Business Segments
Although most of Qualcomm’s revenue comes from the mobile phone and IoT business, it is its automotive business that has experienced significant growth. Qualcomm’s automotive business grew 25% in 2023. In recent years, Qualcomm has rapidly entered the field of automotive cockpit and autonomous driving chips, and is now the best choice for smart cockpit chip suppliers. By the end of 2023, more than 350 million cars had been equipped with Snapdragon digital chassis solutions.
Corporate Responsibility
Qualcomm is committed to corporate responsibility. Annually, we survey our direct manufacturing suppliers and receive water use and GHG metrics that allow us to set benchmarks and strategize future corporate initiatives.
7. Micron Technology
Micron Technology, Inc. ($MU) is a US-based semiconductor company that produces memory chips and other specialized chips for use in various industries, including personal computers, smartphones, and data centers. Micron Technology operates globally and focuses on high-performance memory solutions. The company has extensive experience in the memory chip industry and places a strong emphasis on research and development to innovate new products.
Market Capitalization
- Market Capitalization as of March 26: $132.55 Billion
- Stock price (as of 03/05/2023): US$60.91
Manufacturing Facilities
Most of Micron’s manufacturing facilities are in Taiwan, Japan, and Singapore, with its offices remaining in San Jose, California. The company is also working to boost U.S. production and win government subsidies.
Recent Developments
Micron Technology has joined the ranks of United States CHIPS Act recipients. The Biden Administration plans to give Micron up to $6.1 billion in grants, which will go towards its New York and Idaho facilities. In New York, Senator Chuck Schumer announced that the grant would help Micron construct two new facilities by the decade’s end.
8. Texas Instruments
Texas Instruments Incorporated ($TXN) is a US-based semiconductor company that produces a wide range of analog and embedded processing chips for use in various industries, including automotive, industrial, and personal electronics. Texas Instruments operates globally and sets itself apart through its focus on high-quality analog and embedded processing products, its broad customer base across a wide range of industries, and its emphasis on research and development to stay at the forefront of innovation.
A veritable household name to an extent not usually associated with the historically low-profile semiconductor industry, Texas Instruments boasts an illustrious array of technological milestones. In 1954, the company produced the first commercial silicon transistor. Just a few years later, an engineer working at its Central Research Labs in Dallas played an instrumental role in inventing the integrated circuit. Today, TI possesses a vast portfolio of over 80,000 semiconductor devices and electronic components, including amplifiers, microcontrollers, and memory chips.
Market Capitalization
As of March 26, the market cap of Texas Instruments Incorporated (NASDAQ:TXN) is $154.68 billion.
Key Partnerships
While TI has tens of thousands of customers all over the world, its principal partnerships are with Cisco Systems, Dell, HP, and Apple.
Financial Overview
- Revenue: $17.5 billion (2023)
- Size: 34,000 employees
- Headquarters: Dallas, TX
- U.S. Fabs: 8
- Production Node Range: 45-350 nm
9. Samsung Electronics
Samsung Electronics is a major player in the semiconductor industry, known for its significant investments and collaborations. Samsung Electronics will receive $6.4 billion in funding to help construct a new semiconductor plant in central Texas. Samsung will invest $40 billion to build new plants in Taylor and expand its pre-existing facility in Austin. The plants will be used for semiconductor research and development and semiconductor packaging.
Key Collaborations
Samsung has partnered with ASML to build a new $760 million EUV facility in South Korea. The Seoul facility will utilize ASML’s next-gen extreme ultraviolet (EUV) equipment to produce high-end advanced semiconductors.
Market Performance
The remaining 18 manufacturers all experienced varying degrees of decline. Among them, storage vendors in particular experienced the most severe decline. Traditional memory chip makers Samsung (-34%), Micron (-35%), SK hynix (-28%), Kioxia (-37%), and Western Digital/SanDisk (-26%) have all declined in sales rankings as a result. Samsung Electronics Co., Ltd. (SSNLF.US) semiconductor revenue fell 34% to $50.9 billion, the lowest value of its annual semiconductor sales output since 2016. Despite the poor sales performance of memory vendors last year, DRAM and NAND flash memory prices are showing a strong upward trend, which will enable memory IC vendors to achieve the strongest revenue growth in 2024.
10. Applied Materials
As one of the world’s leading suppliers of manufacturing equipment, services, and software for the semiconductor industry, Applied Materials plays a crucial role in the global chipmaking ecosystem. The company counts Taiwan Semiconductor Manufacturing Company (TSMC), Intel, and Samsung among its chief customers, and its deep repertoire of process technology products is used to fabricate advanced semiconductors.
Key Statistics
- Revenue: $26.5 billion (2023)
- Size: 34,000 employees
- Headquarters: Santa Clara, CA
Recent Challenges
Last year, Applied Materials came under criminal investigation by the U.S. Justice Department. The company had allegedly violated export controls by shipping hundreds of millions of dollars of fabrication equipment to Semiconductor Manufacturing International Corporation (SMIC). The partially state-owned company, which is China’s largest chipmaker, has been the target of U.S. export restrictions.
Industry Relationships
Applied Materials maintains strong relationships with several key players in the semiconductor industry, including TSMC, Intel, and Samsung. These partnerships are crucial for the company’s ongoing success and innovation in semiconductor manufacturing technology.
Conclusion
As we navigate through 2023, the semiconductor industry continues to demonstrate resilience and innovation despite economic challenges. The companies highlighted in this article are at the forefront of technological advancements, driving the market with their cutting-edge solutions. While the rankings and revenue performances of these suppliers may fluctuate, their commitment to pushing the boundaries of semiconductor technology remains steadfast. Keeping an eye on these top semiconductor suppliers will be crucial for anyone looking to stay informed about the future of this pivotal industry. Whether it’s through breakthroughs in automotive chips, advancements in AI, or improvements in storage solutions, these companies are set to shape the landscape of technology in the years to come.
Frequently Asked Questions
What are the top semiconductor companies to watch in 2023?
The top semiconductor companies to watch in 2023 include Intel, Nvidia, TSMC, AMD, Broadcom, Qualcomm, Micron Technology, Texas Instruments, Samsung Electronics, and Applied Materials.
Why are semiconductors important?
Semiconductors are crucial because they are the foundation of modern electronics, enabling the functionality of devices such as smartphones, computers, and various other digital appliances.
Which company had the highest revenue among semiconductor suppliers in 2023?
Intel led the semiconductor market with a revenue of $54 billion in 2023.
What challenges did the semiconductor industry face in 2023?
The semiconductor industry faced a challenging economic environment, including a downward cycle, mixed signals in manufacturing, and an oversupply issue in early 2023.
How did Nvidia perform in the semiconductor market in 2023?
Nvidia bucked the trend in 2023, showing significant growth despite the overall downturn in the semiconductor market.
Are foundry companies included in the top semiconductor rankings?
Yes, foundry companies are included in the top semiconductor rankings, primarily to compare annual sales rather than market share.
