TrendForce: inventory reduction in Q1 fell short of expectations
Recently, a study by TrendForce unveiled that the total revenue of the top ten global IC design companies in the first quarter of 2023 was approximately $33.86 billion. This represents a modest sequential growth of 0.1% when compared to the preceding quarter’s $33.96 billion. The first quarter of this year saw a less-than-anticipated drawdown of supply chain inventory, coinciding with the traditional off-season, resulting in overall market demand being somewhat lackluster. Nevertheless, a surge in urgent orders due to exceptional circumstances, combined with the boost provided by certain new products, helped maintain this quarter’s revenue on par with the previous one.
Qualcomm retains its position as market leader, its handheld devices division witnessing an approximate 6.1% sequential growth due to shipments of the new flagship Snapdragon 8 Gen 2 chip. This effectively offset the slump in the automotive and IoT divisions, leading to a slight overall revenue increase of 0.6% to $7.94 billion in the first quarter of 2023, securing a 23.5% market share. Broadcom, due to product dividends ebbing and a slowdown in server storage demand, coupled with an off-season impact on its wireless business, saw a decline in overall revenue to $6.91 billion, resulting in a 20.4% market share. With the boom in generative AI and cloud computing demand, and the launch of the new GeForce RTX 40 series, Nvidia witnessed a 13.5% sequential growth in overall revenue to $6.73 billion, increasing its market share to 19.9%.
In contrast, AMD saw a decline of around 4.4% in overall revenue to $5.35 billion due to inventory adjustments by clients and reduced corporate demand, coupled with off-season factors, reducing its market share to 15.8%. MediaTek, heavily reliant on smartphones and other consumer-grade chips, was impacted by multiple negative factors, with its mobile and power management IC businesses declining by about 20% and 13% respectively. However, thanks to the restocking of TV-related products on its intelligent terminal platform, the overall first quarter 2023 revenue drop was mitigated to $3.15 billion, a sequential decline of 8.8%, reducing its market share to 9.3%. Marvell, primarily affected by inventory adjustments by customers, saw a decrease in overall revenue to $1.35 billion, a sequential decline of 7.1%, resulting in a 4% market share.
Parade Technologies, ranking seventh, saw an increase in overall revenue to $790 million, a sequential growth of 10.7%, raising its market share to 2.3%, thanks to a 24% and 2% sequential growth in its system-on-chip and panel driver IC businesses respectively. Realtek maintained its eighth position, while power management IC manufacturer MPS and Weir Semiconductor placed ninth and tenth respectively, with the latter displacing Cirrus Logic from the top ten.
TrendForce anticipates positive growth ahead as companies’ inventory levels gradually return to healthy standards and new product stimuli come into play. Nvidia, in particular, is capturing attention, with AI-related chip deployments stimulating revenue growth at a significant pace, suggesting that it may potentially overtake Qualcomm to reach the pinnacle in the second quarter of 2023.
