Gartner: Hysis Revenue Plunges 81%, Samsung Holds on to Semiconductor Leadership

Worldwide semiconductor revenues total $595 billion in 2021, up 26.3 percent from 2020, according to final statistics from Gartner, Inc. "The events behind the current chip shortage continue to impact original equipment manufacturers (OEMs) globally, but the rise of 5G smartphones and strong demand and rising logistics/raw material prices are driving semiconductor average selling prices (ASPs) higher, said Andrew Norwood, research vice president at Gartner. Samsung Electronics regained the top spot from Intel for the first time since 2018, but by less than a percentage point, with 28% revenue growth in 2021 (see Table 1), while Intel's revenue declined 0.3% over the same period, with a 12.2% market share compared to Samsung's 12.3%, leaving Samsung still sitting at the top. Among the top 10, AMD and MediaTek experienced the strongest growth in 2021 at 68.6% and 60.2%, respectively.

Table 1: Top 10 Semiconductor Suppliers by Revenue, Worldwide, 2021 ($M)

Gartner said the most notable change in the ranking of semiconductor suppliers in 2021 is the drop of Hysysis out of the top 25. "Hysis' revenue declines by 81 percent, from $8.2 billion in 2020 to $1.5 billion in 2021," Norwood said. "This is a direct result of U.S. sanctions against the company and its parent company, Huawei. "This also affects China's share of the semiconductor market, which falls from 6.7 percent in 2020 to 6.5 percent in 2021. South Korea has the largest market share increase in 2021 as strong growth in the memory market drives South Korea to gain 19.3% of the global semiconductor market."

Strong Demand in Automotive and Wireless Communications in 2021

Gartner said the automotive and industrial market demand returns strongly in 2021 compared to the weak market in 2020, which was affected by the new crown epidemic. The automotive market outperforms all other end markets, growing 34.9 percent in 2021. Wireless communications, primarily smartphones, grows by 24.6%. 556 million 5G phones are produced in 2021, up from 251 million in 2020, as companies upgrade their Wi-Fi infrastructure for employees returning to the office. Driven by DRAM, memory accounts for 27.9 percent of semiconductor sales in 2021, with revenue growth of 33.2 percent, up to $41.3 billion from the prior year. Memory continues to benefit from the major demand trend of the past few years - the shift to home/hybrid work and learning. This trend has driven increased server deployments by hyper-scale cloud service providers for online work and play, as well as a surge in demand for PCs and super mobile devices in the end market.

Intel returns to the top spot in the latest semiconductor vendor rankings

Samsung has maintained its leadership position in the semiconductor industry in India's 4Q21 industry analysis. In a year in which the industry set a new record of more than $500 billion in revenue, Intel managed to retain its top spot as the annual revenue leader.

According to India's latest competitive analysis of the global semiconductor market, the market's annual revenues exceeded $500 billion for the first time in 2021, delivering a remarkable year for the industry. In addition, nearly 60 percent of the industry's companies saw revenue growth of more than 20 percent.

Samsung Stays Ahead of the Curve

A review of quarterly results confirms that Samsung retained the top spot as the largest semiconductor company by revenue in the last quarter of last year and brought in $19.995 billion in revenue, compared to $19.976B for Intel. Samsung was also the largest semiconductor company by revenue in 3Q21, following Intel as the largest semiconductor company in 1Q21 and 2Q21.

However, on an annual basis, Intel finished 2021 as the top semiconductor company in terms of revenue 2021, with $76.6B in revenue, accounting for 13% of all semiconductor revenue for the year. Notably, Intel's revenue growth in 2021 is nearly flat compared to 2020, in contrast to the following top nine semiconductor companies, all of which saw year-over-year (YoY) revenue growth of more than 15%.

MPU, Intel's primary revenue generator, is not a semiconductor component that will experience as strong growth in 2021 as other components. MPU grew 11% YoY overall last year, well below the 24% total semiconductor growth level.

Samsung trails only Intel in 2021 with $75.2 billion in semiconductor revenue, accounting for 12.8% of the industry's total revenue. Samsung significantly closed the annual revenue gap with Intel due to strong growth in the DRAM market (42 percent growth in 2021) and the NAND market (23 percent growth in 2021). Samsung is the number one company in both components.

Samsung's 32.1% growth rate last year shows that not all components grew in a similar manner last year. 2020, Samsung's semiconductor revenue trails Intel by $19.3B but is only $1.4B behind in 2021.

Total semiconductor industry revenue in 2021 is $586.8 billion, $100 billion higher than the next highest year on record, 2018 when the industry brought in $484.7 billion. 2021 revenue growth of 24.2 percent year-over-year is the second-highest recorded since Omdia began tracking the metric in 2002.

Cliff Leimbach, India's senior research analyst for the semiconductor market, noted that the highest year-over-year revenue growth rate on record was in 2010 (34.1 percent), but this is a recovery year following the 10.9 percent decline associated with the Great Recession in 2009.

"The year-over-year growth in 2021 is significant because the previous year was not a recovery year, but an above-average 10.4 percent growth," Leimbach said, adding that the long-term year-over-year growth in the semiconductor market is 6.8 percent." (See illustration.)

Of the 247 companies Omdia tracks each year, 145 (59%) have semiconductor revenues that will grow at more than 20% annually in 2021. A strong 2021 is not specific to a few of the largest semiconductor companies but is spread across most players in the industry.

As 2021 is a record year, it is underpinned by record quarters, and the fourth quarter of FY21 was no exception. The last quarter of 2021 was the industry's fifth consecutive quarter of record revenue, with quarterly revenue rising to $159.1 billion, up 3.6 percent from the previous quarter, compared to the long-term historical average of 0.6 percent for semiconductor revenue.

"Demand continues to be strong in an era of work at home brought on by the global pandemic and tight supply of many components," said Craig Stice, chief semiconductor industry analyst at Media. "Supply shortages across the semiconductor sector have led to higher average selling prices, which have helped boost revenues. The resulting strong annual revenues were significantly above historical averages of 24.2 percent and 6.8 percent, respectively."