GlobalData : Sustainable supply chain initiatives helped majority of the top 20 semiconductor companies thrive in 2021, says GlobalData

08 Jul 2022
Sustainable supply chain initiatives helped majority of the top 20 semiconductor companies thrive in 2021, says GlobalData Posted in Business Fundamentals

Sustainable supply chain initiatives helped majority of the top 20 semiconductor companies thrive in 2021, says GlobalData

In 2021, approximately 95% of the top 20 publicly traded semiconductor companies by revenue reported more than a 22% year-on-year (YoY) growth in revenue. This comes despite supply chain issues, disruptions in the logistic network and a greater demand for technology, finds GlobalData, a leading data and analytics company.

Divya Vootkuru, Company Profiles Analyst at GlobalData, comments: "All of the top 20 semiconductor companies reported positive YoY revenue growth in 2021, with 20% including Qualcomm, NVIDIA, MediaTek and Advanced Micro Devices registering a revenue growth of over 50%."

A significant increase in customer demand for electronic products and making prepayment arrangements in supply chain networks resulted in major semiconductor companies expanding their business operations. According to research by GlobalData, the semiconductor industry was valued at $500 billion in 2021* and is expected to grow at a compound annual growth rate (CAGR) of 7% between 2021-2025.

Vootkuru adds: "However, a delay in product delivery to customers or cancellations due to disruptions could have had a material adverse effect on business operations. To avoid this, semiconductor companies started implementing sustainable supply chain initiatives. These included long term purchase commitments, prepayment arrangement with suppliers and additional capacity arrangements. Long term contracts with suppliers and an increase in manufacturing facilities will help semiconductor companies to reduce delays and product cancellation issues."

Advanced Micro Devices (AMD)

AMD registered a 68% YoY revenue growth due to the launches of AMD Radeon graphic, AMD Instinct, MI200, AMD Ryzen mobile processor and EPYC server processors and an increase in its computing and graphics and enterprise, embedded and semi-custom product sales.

NVIDIA

Higher sales from GeForce GPUs and demand for NVIDIA's Ampere architecture products resulted in its gaming segment growing by 61%. NVIDIA Ampere architecture GPUs sales also had a 58% increase in data center revenue. Both of these helped NVIDIA to register a 61% YoY growth in revenue.

Qualcomm and Mediatek

An increase in demand for 5G products across handsets, radio frequency front-end (RFFE) and 5G system in chip (SoC) resulted in Qualcomm and Mediatek improving their financial performance. The launch of 5G multimode SoC and the acceleration of 5G migration resulted in Mediatek achieving a revenue growth of 62% and a 187% increase in net earnings. Commercial deployments of 5G networks assisted Qualcomm in achieving a 50% growth in revenue and 74% of YoY net income growth.

ON Semiconductor

ON Semiconductor reported a revenue growth of 28% driven by higher demand for PSG, ASG and ISG semiconductor products. The company also had a net income growth of 331% which was attributed to Onsemi sales.

NXP Semiconductor

Among the top 20 semiconductor companies, NXP Semiconductor registered very high net earnings due to adjustments to reconciling its net income of $1.6 billion and $0.4 billion from operating assets and liabilities.

* Changing Landscape of the Semiconductor Industry