Global semiconductor chip shortage triggers a profiteering season for manufacturing giants

The quarterly revenue of 10 of the biggest semiconductor chip manufacturing companies reached up a record high of $22.75 billion in 2021. 

A TrendForce report stated that the revenue of the top 10 foundries rose by 1% quarter-on-quarter (QoQ), even as the result for Q4 2020 is a high base for revenue comparison.

This surge is reported at a time when the rising demand for various end devices, coupled with manufacturers ramping up component procurement activities, and foundry capacities, have resulted in a global chip shortage since 2020. This shortage is unlike the ones that have been witnessed before, where specific chips such as memory chips were in short supply.

Taiwan Semiconductor Manufacturing Corp (TSMC) bagged the top spot by generating 54% of the world’s chip foundry revenues in Q1 2020. The company’s quarterly revenue was reported as $12.9 billion, which is a 2% QoQ increase. Out of this, TSMC’s main revenue comes via 7nm and 16/12nm nodes.

Even though Samsung posted a drop of 2% QoQ in its foundry revenue for Q1 2021 to $4.11 billion, it managed to grab the second spot. Power outages in Austin forced Samsung to temporarily shut down its fab Line S2 for a month until early April, resulting in a revenue drop.

Due to the undersupply situation, with fairly brisk shipments, United Microelectronics Company’s 5% QoQ revenue jump was triggered by raised prices. The Taiwan-based company reported a revenue of $1.68 billion for Q1 2021.6.1

GlobalFoundries posted a revenue drop of 16% QoQ to $1.3 billion after its Fab3E (an 8-inch wafer fab) in Singapore was handed over to VIS. Semiconductor Manufacturing International Corporation reported a 12% increase in revenue to $1.1 billion mainly due to the increased wafer input from Qualcomm, MPS, and DDIs made with its 40/28nm HV process technology.

With the shortage expected to continue in Q2 2021, TrendForce analyst Joanne Chiao wrote that the quarterly total revenue of the top 10 foundries will reach a historical high by undergoing a 1-3% QoQ increase in the current quarter. 

Picture Credits: SemiconductorForu