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Semiconductor giants make more money than ever

Semiconductor giants make more money than ever

June 2, 2021: -The world’s ten biggest semiconductor manufacturing companies saw their revenues increase to a record high in the first quarter of 2021, according to market research firm TrendForce.

On Monday, the combined quarterly total revenue of the chipmakers, known as foundries, increase to a record high of $22.75 billion in the first quarter, according to a TrendForce blog published.

Semiconductor are used in everything from cars and game consoles to washing machines and toothbrushes. They form part of the lifeblood of the global economy and are vital to many of the world’s biggest industries. But they’re also in short supply, and the shortage could last until 2023.

“Owing to soaring demands for various end the devices, manufacturers have been telling up their component procurement activities and foundry capacities, resulting in shortage from the year 2020, with various foundries which raise their wafer prices and adjusting their product mixes to ensure profitability” TrendForce analyst Joanne Chiao wrote.

Nearly 57% of the chip foundry revenues of the world in the last quarter were generated by one Taiwanese chipmaker, the Taiwan Semiconductor Manufacturing Corporation (TSMC).

The Taipei-headquartered firm is seeing its revenue increase to $12.9 billion in the first quarter, up 2% on the first quarter of the year 2021, according to TrendForce, which analyzed how well each of the various chips sold of the company.

The U.S. and the European Union have added that they want to be more self-reliant when it comes to semiconductors as most of the world’s chips are made in Asia.

“The revenue from the 7nm foundry service has kept increasing at a stable speed thanks to orders from AMD, MediaTek, and Qualcomm,” Chiao said, that adds that sales are increased 23% in the last quarter.

However, sales of TSMC’s most minor and most innovative 5nm chips saw a quarterly decrease, Chiao said, adding that the main reason is Apple.

Elsewhere, South Korean chip giant Samsung saw its foundry revenue decreased 2% in the last quarter, around $4.1 billion.

Chiao said that’s partly due to a freak winter storm in February in Texas that caused power outages in Austin and forced Samsung to stop producing chips at one of its plants in the state temporarily.

Elsewhere, Taiwan’s United Microelectronics Corporation saw its quarterly revenues climb 5% quarter on quarter to $1.6 billion, while SMIC saw its climb 15% to $1.1 billion in China.

TrendForce expects the chip foundries to see further revenue growth as the prices of the chip wafers they produce continue to increase, and demand persists.

It said the total quarterly revenue of the top 10 foundries would “once again reach a historical high” by undergoing a 1-3% increase quarter-on-quarter for the second quarter of the year 2021.

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