The world's top 10 IC design companies were released, and NVIDIA reached the top for the first time

Our reporter Qin Xiao reports from Beijing

According to TrendForce research, the world's top 10 IC design companies will have a combined operating revenue of approximately US$167.6 billion in 2023, up 12% year-on-year. Among them, NVIDIA's operating income in 2023 will reach 55.268 billion US dollars, an annual growth of 105%, reaching the top for the first time; Qualcomm (Qualcomm) and MediaTek (MediaTek) are slightly sluggish, among them, Qualcomm's operating income in 2023 will reach 30.913 billion US dollars (QCT only), a year-on-year decrease of 16%.

A number of industry insiders said in an interview with a reporter from China Business News that the technological innovation and product differentiation of companies represented by Nvidia in specific fields such as high-performance computing, artificial intelligence and data centers have brought them significant growth in market share.

In addition, there are differences in the market and application needs of different IC design companies, such as smart phones, automotive electronics, Internet of Things and other market fluctuations will affect the revenue performance of related IC design companies.

AI continues to pull

Integrated circuits can be divided into three major sections: design, manufacturing, and packaging and testing, in which the level of design determines the function, performance and cost of chip products. IC design is integrated circuit design, also known as VLSI design, which refers to the design process with integrated circuits and VLSI as the goal.

With the wide application and strong demand for AI technology, the development speed of cutting-edge applications such as data centers, autonomous driving, humanoid robots, and AI PCs has increased significantly. In these fields, AI technology provides strong support for data processing, energy consumption management, and precise control, and promotes profound changes in MCUs, analog chips, BMS, measurement perception, and high-performance computing, and also drives the growth of the IC design industry.

According to TrendForce data, among the top five global IC design companies in terms of revenue in 2023, AI chip design companies have made a lot of money. In particular, NVIDIA, more than 80% of the current AI acceleration chip market has been won by NVIDIA, and it is expected that in 2024, H200 and the next generation of B100/B200/GB200 will also continue to drive NVIDIA's operating income growth. Broadcom's operating income in 2023 will reach $28.445 billion (excluding the semiconductor division alone), an annual growth of about 7%, and AI chip revenue accounts for nearly 15% of its semiconductor solutions.

Although AMD's operating income in 2023 will decrease by 4% year-on-year to $22.68 billion, the revenue of most divisions will decline due to the decline in demand for PCs and the destocking of inventory. In the data center business alone, the contribution of Xilinx, which was acquired through the acquisition of the embedded business, increased by 17%. In addition, the MI300 series of AI GPUs released by the company in the fourth quarter of last year will be the biggest driver of AMD's operating revenue growth in 2024.

From a domestic point of view, benefiting from the strong demand for AI, many chip design companies have taken the lead in the industry to return to positive performance growth. Among them, Torch Core Technology will achieve operating income of 520 million yuan in 2023, a growth rate of 25.41% compared with the same period in 2022; The net profit after deducting non-recurring gains and losses was 51.126 million yuan, a year-on-year increase of 64.16%. Lihe Micro has also achieved remarkable results in 2023, with the company's annual operating income of 579 million yuan, an increase of 14.96% over the same period in 2022; The net profit attributable to shareholders of listed companies reached 107 million yuan, a year-on-year increase of 42.26%. In addition, Nanxin Technology has also achieved good results in 2023, with the company's annual operating income reaching 1.78 billion yuan, a year-on-year increase of 36.87%; The net profit attributable to shareholders of the listed company reached 261 million yuan, achieving positive growth.

Zhang Yue, chairman of Aoyu International, told reporters that Nvidia may have made significant technological progress in its core business, such as GPU, AI, data center and other fields, and successfully launched differentiated products to meet the high demand of the market. With the development of technologies such as artificial intelligence, deep learning, cloud computing, and more, the demand for high-performance computing chips has surged, which may benefit companies focused on these areas, such as NVIDIA.

Guo Tao, an angel investor and expert in the field of artificial intelligence, said that with the wide application of AI technology, the market demand for high-performance computing is also growing, and NVIDIA's GPU just meets this demand. In addition, NVIDIA has successfully seized opportunities in emerging fields such as autonomous driving and cloud computing to further expand its market share.

Consumer electronics "lag behind"

Some people are happy and some are worried, compared with AI chip design companies, Qualcomm and MediaTek have been hit by the trough of the smartphone market. Qualcomm's operating income in 2023 will reach $30.913 billion (QCT only), down 16% year-on-year, mainly due to sluggish demand from the handheld device business and IoT business. MediaTek's revenue in 2023 will reach US$13.888 billion, down 25% year-on-year, with smartphones, power management ICs, and Smart Edge businesses all declining.

In this regard, Guo Tao believes that the performance of Qualcomm and MediaTek has been affected in many ways. On the one hand, the slowdown in the global smartphone market has put pressure on companies that rely on mobile phone chip sales. On the other hand, the development of these two companies in emerging fields such as 5G and AI has not met expectations, and they have not succeeded in seizing opportunities in other fields, resulting in a decline in their revenue.

However, the consumer electronics market is ushering in a recovery, and in the first quarter of this year, all segments of consumer electronics, including tablets, have ushered in a good start. According to Canalys, the global mobile phone market saw double-digit growth, with 296.2 million units shipped at a 10% growth rate, and total PC shipments reached 57.2 million units, up 3.2% year-on-year. With the growth of sales of mobile phones, computers, tablets and other products, the global consumer electronics industry is entering a recovery growth channel.

TrendForce also believes that in addition to the fact that IC inventory has returned to a healthy level, the annual growth rate of the global IC design industry's operating revenue in 2024 is expected to continue to increase due to the AI boom, as major cloud service providers (CSPs) continue to expand the construction of large language models (LLMs) and AI-related applications to personal devices.

In Guo Tao's view, the current market pattern may continue for a while, because the current situation is the result of a combination of factors. As the consumer electronics market picks up, Qualcomm and MediaTek's performance is likely to pick up again. As the global economy recovers, the consumer electronics market is likely to pick up gradually, which will bring more opportunities and room for growth for these companies. In addition, these companies are also constantly introducing new products and technologies to meet the changing needs of consumers, and as a result, these companies are likely to gradually recover to higher levels as the market changes. However, this takes time to observe and verify.

(Editor: Zhang Jingchao Review: Li Zhenghao Proofreader: Yan Yuxia)