New iPhone Models Become Key to Qualcomm's Top Spot in 3Q20 Revenue Ranking of Global Top 10 IC Design (Fabless) Companies, Says TrendForce

December 23, 2020 -- Apple’s release of the iPhone 12, which has been popular in the consumer markets, led to soaring demand for Qualcomm’s 5G modems and RF chips, in turn propelling Qualcomm’s revenues past that of its rival Broadcom once again to clinch the number one spot in the revenue ranking of global top 10 IC design (fabless) companies for 3Q20, according to TrendForce’s latest investigations.

With US$4.967 billion in quarterly revenue, a 37.6% YoY increase, Qualcomm retook the first spot on the top 10 list despite the delayed release of the iPhone 12. Qualcomm’s remarkable performance is attributed to the following: First, Qualcomm returned to Apple’s supply chain earlier this year; second, its OEM clients had been aggressively procuring components due to the COVID-19 pandemic; and finally, 5G RF components gradually began contributing to Qualcomm’s revenue. Second-ranked Broadcom recovered from its YoY revenue declines, which had lasted for six consecutive quarters, and registered $4.626 billion in quarterly revenue in 3Q20, a 3.1% increase YoY, primarily due to the increased demand for cloud, wireless, and networking products. In addition, being a chip supplier for the iPhone 12 allowed Broadcom to largely shrug off the impact of the China-U.S. trade war.

Third-ranked Nvidia’s revenues for 3Q20 increased by 55.7% YoY, the highest % growth on the top 10 list, on the back of Mellanox’s networking chips. On the other hand, AMD scored wins in the notebook, desktop, data center, and gaming console markets. The company’s quarterly revenue reached $2.801 billion, a 55.5% increase YoY, which is the second-highest % growth behind that of Nvidia.

Taiwanese fabless companies performed competently on the whole. Worth noting is the fact that both Realtek and Novatek benefitted from their clients’ aggressive procurement activities and increased their quarterly revenues by more than 40% YoY. Realtek and Novatek took seventh and eighth spots on the top 10 list, respectively, both surpassing Marvell. In particular, Realtek trailed closely behind Xilinx in quarterly revenue by only about $7 million.

Conversely, Xilinx and Dialog remained the only two fabless companies to see declining revenues in 3Q20, as the former suffered the impact of the China-U.S. trade war, which lowered the revenue from its networking and communication by 37% YoY, thereby dampening Xilinx’s overall performance. Likewise, Dialog posted subpar performances with its custom mixed-signal products, the revenue from which decreased by 19.6% YoY, leading to an overall weak third quarter for the company as a whole, with a quarterly revenue of merely $386 million.

Despite the effect that the trade war and the pandemic had on the industry, demand for data center, networking, and notebook products rose on account of WFH and distance education applications. Furthermore, concerns about potential supply chain disruptions compelled OEM clients to aggressively procure components. Looking ahead to 2021, TrendForce analyst C.Y. Yao believes that fabless companies will raise their prices to ensure a sufficient supply of upstream foundry capacities, in light of the extreme capacity shortage across the foundry industry, as well as future uncertainties with the trade war and the pandemic. For the most part, the global fabless revenue is expected to maintain an upward trajectory next year.