Semiconductor Industry: An Overview

Semiconductors are the prime element powering a multitude of products around us, ranging from automotive to advanced generative AI tools like ChatGPT. The Fourth Industrial Revolution has fuelled the demand for semiconductors, which are vital for smart devices and facilitate connectivity. Mckinsey has called semiconductors “the unsung heroes of the technology world.”

The semiconductor market size is growing rapidly. According to a report by Precedence Research, the global semiconductor market was valued at $664.2 billion in 2023 and has been estimated to grow to $1.88 trillion by 2032 at a compound annual growth rate (CAGR) of 12.28%.

The Asia Pacific region is the most dominant semiconductor market and has been estimated to hold this position throughout the forecast period. In 2022, the Asia Pacific semiconductor market was valued at $230.5 billion. The presence of top-notch semiconductor companies in China, South Korea, Japan, and Taiwan greatly contributed to the region’s distinction in the global market. North America and Europe have also been estimated to grow substantially during the forecast period.

According to McKinsey, 70% of the future growth of the semiconductor industry would come primarily from three main industries: automotive, computation, and data storage and wireless industry—the automotive industry will account for almost 20% of the market expansion in the coming years. The surge in demand for electric vehicles is expected to also contribute to the semiconductor industry’s growth.

Latest Trends And Developments

The semiconductor industry faced a massive shortage post-pandemic. The pandemic caused a drop in semiconductor demand for the automotive industry while simultaneously causing an upsurge in demand by the tech industry. According to McKinsey, auto sales declined as much as 80% in Europe in the early days of the pandemic, and as more people started working from home, there was a rising need for electronic devices.

The automotive industry contracts usually have a shorter term focused on quick delivery of products. As a canon event, the drop in semiconductor demand by the automotive industry led to semiconductor companies signing longer-term contracts with other industries. Post-pandemic, when the automotive industry started recovering, the semiconductor industry was already bound in longer contracts delivering products to other industries. This difference caused a supply-demand imbalance, majorly contributing to the worldwide semiconductor shortage.

Semiconductor companies are employing various strategies to combat semiconductor shortages. The companies have started nurturing ecosystem capabilities through collaboration and investments. On September 12, Reuters reported that Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) will be investing almost $100 million in the initial public share offering (IPO) of Arm Holdings Plc. The chairman of Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) has acknowledged the significance of Arm in the semiconductor ecosystem for both the technology and customers. The company wants Arm to be ‘successful’ and ‘healthy.’

Semiconductor companies are also building capacity through collaborations and partnerships. On September 5, Reuters reported that Intel Corporation (NASDAQ:INTC) has partnered with Tower Semiconductor Ltd. (NASDAQ:TSEM). Intel Corporation (NASDAQ:INTC) would provide foundry services to the company, which would then provide an investment of $300 million in Intel’s New Mexico factory. The equipment to be installed in the New Mexico factory is going to be owned and acquired by Tower Semiconductor Ltd. (NASDAQ:TSEM). This partnership will help Intel Corporation (NASDAQ:INTC) meet the growing demand as it would add 600,000 photo layers per month to its capacity. The companies are very positive about this collaboration, as expressed by the CEO of Tower Semiconductor Ltd. (NASDAQ:TSEM), who sees this collaboration as the first step in developing many “unique synergistic solutions” in the future.

Another strategy that could help meet the soaring semiconductor demand while dominating the market is technology advancement by designing and manufacturing the most efficient products. On August 29, Reuters reported that Intel Corporation (NASDAQ:INTC) would launch a new data center chip named “Sierra Forest” next year. The chip will have a “240% better performance per watt” than the current generation of similar chips. The new data center chip will be more energy-efficient, enabling it to compete with other companies processing data chips like Advanced Micro Devices, Inc. (NASDAQ:AMD).

Semiconductor companies are also signing longer contracts to gain more stability and certainty of the future. On September 11, Reuters reported that QUALCOMM Incorporated (NASDAQ:QCOM) has signed a deal to provide the tech giant Apple Inc. (NASDAQ:AAPL) with 5G chips. The deal will last till 2026 and would significantly benefit both companies. Apple Inc. (NASDAQ:AAPL) will be able to effectively cater to the supply chain challenges while QUALCOMM Incorporated (NASDAQ:QCOM) will earn billions of dollars. Apple Inc. (NASDAQ:AAPL) had previously signed a deal with the company in 2019.

Many semiconductor companies are competing to meet the growing product demand while staying ahead of their competitors. These companies have varying levels of influence in the semiconductor industry. Based on their market share, we have made a list of the top companies in the semiconductor market.

Photo by Slejven Djurakovic on Unsplash

Our Methodology

To make our list of the semiconductor market share by company: top 12, we initially started sifting through various sources to find the most prominent semiconductor companies, including Yahoo Finance articles and Presedence Research report. We used a consensus method to find the semiconductor industry’s top 20 most noteworthy companies. There is an absence of data for exact market shares by companies, so we manually calculated each company’s percentage market share. We have used the latest available annual data for these calculations i.e., 2022.

According to Gartner, the global semiconductor industry made $599.6 billion in revenue in 2022. We sourced the data for total revenues for each company in 2022 from their annual financial reports, Reuters, and Nasdaq. We have calculated the market share for each company using these values. The list has been arranged in ascending order based on the market share.

It is significant to note that the overall share of NVIDIA Corporation (NASDAQ:NVDA) has significantly increased over 2023. On August 23, the company reported that revenue for the fiscal second quarter of 2023 was up 101% from last year and up 88% from the previous quarter. However, the calculations were based on 2022 data, thus resulting in a relatively lower ranking for the company.

Semiconductor Market Share By Company: Top 12

12. STMicroelectronics NV (NYSE:STM)

Total Revenue in 2022: $16.13 Billion

Total Market Share: 2.7%

STMicroelectronics NV (NYSE:STM) is a European chipmaking company that provides automotive, power management, and other products. It is one of the largest semiconductor companies in the world. STMicroelectronics NV (NYSE:STM) contributed 2.7% to the total market share of the semiconductor industry in 2022.

11. Tokyo Electron Limited (TYO:8035.T)

Total Revenue in 2022: $16.58 Billion

Total Market Share: 2.77%

Tokyo Electron Limited (TYO:8035.T) is a leading semiconductor company in the industry. Tokyo Electron Limited (TYO:8035.T) develops a wide variety of semiconductor products, including deposition systems, etchers, and cleaners. In 2022, the company reported a total revenue of $16.58 billion.

10. Lam Research Corporation (NASDAQ:LRCX)

Total Revenue in 2022: $17.227 Billion

Total Market Share: 2.88%

Lam Research Corporation (NASDAQ:LRCX) is an American semiconductor company that designs, manufactures, and markets semiconductor products. In 2022, Lam Research Corporation (NASDAQ:LRCX) generated $17.2 billion in revenue and held a 2.88% market share.

9. Texas Instruments Incorporated (NASDAQ:TXN)  

Total Revenue in 2022: $20.028 Billion

Total Market Share: 3.35%

Texas Instruments Incorporated (NASDAQ:TXN) has one of the top semiconductor market shares by company. Texas Instruments Incorporated (NASDAQ:TXN) offers a wide array of semiconductor products, including digital ICs used in computers and smartphones. The company reported a total revenue of $20.028 billion, making up 3.35% of the market share.

8. Advanced Micro Devices, Inc. (NASDAQ:AMD) 

Total Revenue in 2022: $23.601 Billion

Total Market Share: 3.94%

Advanced Micro Devices, Inc. (NASDAQ:AMD) is one of the most significant names in the semiconductor industry. The company designs and manufactures many semiconductor products, including EPYC processors and Ryzen processors. Advanced Micro Devices, Inc. (NASDAQ:AMD) processors are designed high-performance computing. In 2022, the company made $23.601 billion in revenue.

Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM), Intel Corporation (NASDAQ:INTC), and QUALCOMM Incorporated (NASDAQ:QCOM) are some of the biggest names in the semiconductor industry that are constantly innovating.

7. Applied Materials, Inc. (NASDAQ:AMAT)

Total Revenue in 2022: $25.785 Billion

Total Market Share: 4.31%

Applied Materials, Inc. (NASDAQ:AMAT) is one of the top semiconductor companies that dominates the industry by market share. The company offers many semiconductor products, including process control products including sensors, and actuators. Applied Materials, Inc. (NASDAQ:AMAT) reported a revenue of $25.785 in 2022 and held one of the highest market shares globally.

6. NVIDIA Corporation (NASDAQ:NVDA) 

Total Revenue in 2022: $26.91 Billion

Total Market Share: 4.49%

NVIDIA Corporation (NASDAQ:NVDA) is one of the most significant semiconductor companies in the world. The company has gained massive popularity with the rise of generative AI applications like ChatGPT. The A100 and H100 by NVIDIA Corporation (NASDAQ:NVDA) are vital for developing and training AI applications.

Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM), Intel Corporation (NASDAQ:INTC), and QUALCOMM Incorporated (NASDAQ:QCOM) are giants that are nurturing and driving growth in the global semiconductor market.

Click to continue reading and see the Semiconductor Market Share By Company: Top 5.

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Disclosure: None. Semiconductor Market Share By Company: Top 12 was originally published on Insider Monkey.

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