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In the semiconductor market, a third of revenue in 2021 went to factoryless developers
29.12.2021 [14:38],
Alexey Razin

The growing complexity and capital intensity of new lithographic technologies is forcing an increasing number of processor developers to turn to the services of specialized contract manufacturers. This migration is evidenced by the fact that this year about a third of the revenue in the entire market will be concentrated in the hands of factoryless developers.

Image source: Times Union

This is announced by a new study by IC Insights, which in its full version will present data from the 50 largest suppliers of semiconductor components and all leading contract manufacturers. It is pertinent to recall that some companies maintain vertical integration, being themselves engaged in both the development and production of semiconductor components. These include Intel and Samsung, but it cannot be said that they are satisfied with the current state of affairs. Intel intends to rely more on contract manufacturers’ services, while Samsung wants to attract more orders to its contract business to share the financial burden of new technologies with customers.

As noted by IC Insights, in the outgoing year, the revenue of factoryless developers grew by 22%, while vertically integrated manufacturers faced an increase in revenue of only 6%. Over the past decade, according to the authors of the study, the revenue of factoryless players has doubled to $ 130 billion, and the revenue of companies with vertical integration increased by only 30% to $ 265.7 billion. Factoryless developers did not consistently increase their share in revenue indicators only in 2021, 2021, 20021 and 20221. The last two periods were characterized by an increase in prices for memory, and it is produced by companies with vertical integration, so their positions in monetary terms have strengthened.

The leader among factoryless companies in terms of revenue growth this year should be AMD, which should receive $ 2.8 billion more than last year. Thus, factoryless companies will account for 32.9% of the total semiconductor market revenue this year. In the next five years, this figure should remain at a close level.