The latest semiconductor rankings are out for Q1 and there are a few moves around. Intel of course remains #1 at $6.5B for the quarter, nearly twice the size of #2 Samsung at $3.6B. In turn, Samsung is almost twice the size of the next cluster of Toshiba, TI and ST all around the $1.6B to $2B level, slightly ahead of the next cluster of Qualcomm, Sony, Renasas, AMD and, surprisingly, TSMC, all with revenues around $1.1B to $1.3B.
TSMC was at around 40% of capacity in Q1 as all the fabless companies canceled orders while the semiconductor already manufactured was built into final product and moved through the retail pipeline. Supposedly they are up 50% in Q2, which sounds great until you realized that means that they are only at 60% of capacity.
One interesting metric is to look at Q1 revenue as a percentage of (a quarter of) 2008 revenue. Almost everybody in the top 10 is around 65-75% of where they were, with only Qualcomm and AMD breaking the 80% barrier on the upside, and TSMC the big loser at just 44% of their average quarterly revenue from last year. Even Hynix and NEC, the worst performers measured this way, managed to be at 60% of their 2008 level.
Further down the list, both Sharp and Mediatek are running at about 100% of their 2008 levels, which counts as excellent performance in these trying times. Interestingly too, if you simply add NEC and Renasas together, to naively reflect their proposed merger, then they take the #3 spot, just pushing ahead of Toshiba.
I’m not entirely sure why the falloff is so much worse at TSMC than anywhere else. Since they are a foundry, this presumably reflects poor performance at their customers. It may simply be a bug (or feature) of the fabless business model. If you don’t have a fab then you can cancel orders, although some customers get better pricing with "pay or play" deals, where they irrevocably commit to a minimum number of wafers. Canceling the order is a way to avoid having to ship them at a loss. On the other hand, if you have a fab to fill, then first you cancel anything outsourced (to, say, TSMC) and then you sell product at whatever price you can. Much of the cost of a wafer is depreciation of the fab, and you have that whether you build product or not. Better to sell at a small loss than not sell at all and have a large loss. As I’ve said before, a wafer start in a fab is like a seat on a plane or a room-night in a hotel. You can’t put it in inventory, and if the plane leaves with an empty seat, it is ticket that could have been sold “profitably” at any price that covers the marginal.
Another thing. I’m not quite sure how fabless companies like Qualcomm and Mediatek are handled in these rankings, since their silicon can potentially show up twice, once under their own name and once under the name of whoever manufactured it. As more and more companies, but not all, go completely fabless, it’s not clear what the best way to measure the market is.