To The Moon

Chips are a high-investment, long-term, and high-barrier industry.

Because chip R&D and manufacturing are so expensive, it is difficult for ordinary small businesses to invest enough funds.

Without money investment, it is difficult to innovate and be truly competitive. Especially on core technologies and advanced technologies.

As chip technology progresses, there's a noticeable trend of the strong getting stronger in chip companies.

1. Leaders in chip companies are stronger

Recently, well-known organizations released a list of the world's top 25 semiconductor companies, showing that market share is increasingly concentrated among leading companies.

ICinsights

The top 25 companies generate over 50% of industry sales. Smaller businesses, numbering in tens or hundreds of thousands, can't match the sales of these leading 25.

Within the top 25, the top 10 companies hold 69% of their combined revenue, indicating high concentration.

Based on the ranking changes in 2023, we see that $Taiwan Semiconductor Manufacturing(TSM)$ has moved up one rank, $NVIDIA Corp(NVDA)$ advanced by two ranks, and $Qualcomm(QCOM)$ and $Broadcom(AVGO)$ have both moved up by 2 ranks.

2.The memory market revenue hit a historic decline. $Intel(INTC)$ is expected to regain the top spot in 2023.

Gartner analyst Alan Priestley mentioned the semiconductor industry's cyclicality returning in 2023. The market faced challenges, with memory revenue seeing its worst decline ever.

Gartner noted a 14.1% decrease in semiconductor revenue for the top 25 manufacturers in 2023, reducing market share to 74.4% from 77.2% in 2022.

Gartner reports indicate a 37% drop in storage revenue in 2023 due to decreased demand and excess inventory.

Manufacturers saw shifts in the top 10 semiconductor rankings in 2023 after the memory sector's poor performance. Check the below Table for yearly changes.

Gartner, January 2024

• In 2023, $Intel(INTC)$'s semiconductor revenue dropped 16.7% to $48.7 billion, reclaiming the top spot from $Samsung Electronics Co., Ltd.(SSNLF)$ after 3 years.

• $Samsung Electronics Co., Ltd.(SSNLF)$ 's semiconductor revenue fell sharply by 37.5% to $39.9 billion, securing the 2nd position.

• $Qualcomm(QCOM)$ , with a 16.6% decrease to $29 billion, maintained the third spot (same as 2022).

• $Broadcom(AVGO)$ saw a 7.2% growth to $25.6 billion, jumping to 4th place from 6th in 2022.

• $NVIDIA Corp(NVDA)$ 's 2023 semiconductor revenue soared 56.4% to $24 billion, breaking into the top five due to its AI chip market dominance.

• $STMicroelectronics NV(STM)$ moved up three places to stay at 8, with 7.7% revenue growth in 2023, driven by its strong automotive position.

3. Business and stock performances of Top 10 by Market value

The top 10 Semiconductors by Market value are as follow：

Data as Jan 16th 2024

Top 10’s YTD % in 2023：

YTD % in 2023

Top 10‘s performances in 2024：

YTD % in 2024

Inside which:

$NVIDIA Corp(NVDA)$ is poised for further highs in 2024, prompting the question of where the ceiling lies.

$Broadcom(AVGO)$ and $Advanced Micro Devices(AMD)$ are nearing all-time highs, while $Micron Technology(MU)$ , $Analog Devices(ADI)$, and $ARM Holdings Ltd(ARM)$ are potential candidates for reaching new peaks.

While $Taiwan Semiconductor Manufacturing(TSM)$, $Intel(INTC)$, $Qualcomm(QCOM)$, $Texas Instruments(TXN)$ TXN, has more room than its historical highs, which may mean more room for upside.

Based on the added business Overview，Which semiconductor company are you most optimistic about in 2024?

By ChatGPT