Semiconductor Market Researcher IC Insights released an update to the 2016 semiconductor sales forecast which is interesting on many different levels. It really has been an exciting year for the semiconductor industry, absolutely. Two of the stars of this year’s report happen to be two of my favorite fabless companies, Nvidia and MediaTek, who will post record gains of 35% and 29% respectively.
The fastest growing top-20 company this year is forecast to be U.S.-based Nvidia, which is expected to post a huge 35% year-over-year increase in sales. The company is riding a surge of demand for its graphics processor devices (GPUs) and Tegra processors with its year-over-year sales in its latest quarter (ended October 30, 2016) up 63% for gaming, 193% for data center, and 61% for automotive applications.
The second-fastest growing top-20 company in 2016 is expected to be Taiwan-based MediaTek, which is forecast to post a strong 29% increase in sales this year. Although worldwide smartphone unit volume sales are expected to increase by only 4% this year, MediaTek’s application processor shipments to the fast-growing China-based smartphone suppliers (e.g., Oppo and Vivo), are forecast to help drive its stellar 2016 increase.
Nvidia and MediaTek serve different markets but they have two important things in common: VERY strong leadership and a VERY strong foundry partnership with TSMC.
Nvidia CEO Jen-Hsun Huang and MediaTek CEO Tsai Ming-Kai could not be two more different CEOs. Jen-Hsun is loud and arrogant while Tsai is quiet and humble. The traits they do share are vision and a laser like focus on market opportunity. They both also have Dr. Morris Chang Exemplary Leadership Awards from the Global Semiconductor Association in recognition of “exceptional contributions to driving the development, innovation, growth and long-term opportunities of the fabless semiconductor industry”.
On the foundry side, Nvidia and TSMC are collaborating on a cost effective HPC specific 7nm process to be introduced in Q4 2017. MediaTek is also collaborating with TSMC on an SoC version of 7nm but more importantly will be TSMC’s top customer for the 16FFC fab in China due to go online in 2018. Right now the China SoC market is 28nm centric but that will change in 2018. Mediatek will also use TSMC InFO technology for added cost reduction and performance improvement distancing themselves from the other 14nm SoC offerings for China and other emerging SoC markets (India).
The interesting thing to note about Nvidia’s Q3 2016 results is the surge in data center and automotive business (which is what I mean by vision and market opportunity focus). Given their success in two of the hottest semiconductor market segments, one might predict that Nvidia is a prime acquisition target. In fact, I had wrongly predicted that QCOM would buy Nvidia instead of NXP and I still think they should have but I digress…
My feeling today is that Nvidia should be the one doing the acquiring so I’m working on a shopping list for Jen-Hsun. Please post your suggestions in the comment section and I will make sure he gets them.
You can get a PDF version of the IC Insights research bulletin HERE.