Qualcomm, HiSilicon command top chip growth in 1Q on China sales

Qualcomm Snapdragon X60
Qualcomm has benefited from 5G chip sales to China where the government is pushing 5G infrastructure and subsidizing 5G handset sales, Omdia said. (Qualcomm)

The world’s top-10 semiconductor makers saw a 2% increase in revenue in the first quarter over 4Q 2019 on an increase in PC and server sales due to COVID-19, according to analyst firm Omdia on Tuesday.

Qualcomm and Chinese fabless system-on-chip company HiSilicon were the top performers. Qualcomm was up by 14.6%, benefiting from China’s move to kickstart its economy by pushing deployment of 5G infrastructure and China’s subsidies of the 5G handset market, according to Omdia senior analyst Ron Ellwanger. Qualcomm’s revenues in 1Q were $4.05 billion.

HiSilicon rocked the market with a 40.3% climb in the first quarter over 4Q 2019.  HiSilicon is the chip division of Huawei based in China.  According to Ellwanger, HiSilicon protected itself from the effects of the China/U.S. trade war by building up inventory to ride out revised U.S. trade restrictions taking effect in September. HiSilicon’s revenues were $2.8 billion in 1Q.

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Overall, the top 10 semi companies saw revenues of $63.6 billion in the first quarter, compared to $622 billion in the fourth quarter of 2019, Omdia noted. The entire chip industry saw a 2% decline, however, with all the companies outside of the top 10 seeing a 7% decline. 

omdia chart

Omdia said the quarter-to-quarter sequential comparison makes more sense than comparing the first quarter to 1Q 2019 because of the dramatic economic impact of the pandemic in 2020.

Top-ranked Intel actually saw a 1.8% decline in the first quarter over the previous quarter along with a 1% decline at Nvidia, a 2.1% decline at Broadcom and a 0.5% decline at Texas Instruments.Intel’s revenue haircut came because the COVID-19 surge in computer demand was focused on low-end systems with lower cost chips, Ellwanger said.

On the plus side, Qualcomm saw a 14.6% increase in chip revenue in the first quarter compared to the fourth quarter of 2019, while HiSilicon Technologies saw a 40.3% increase.  Kioxia saw a 10% climb, while Samsung saw revenues jump 1.4%.   SK Hynix and Micron each saw 0.7% increases.

The three leading memory-focused semi suppliers saw revenues expand by 1% during the first quarter.  Samsung, SK Hynix and Micron saw the benefit o growth in data processing, Omdia said. Data processing growth generates demand for NAND flash used in enterprise class solid-state drives.  On its own, NAND memory grew nearly 7% in the first quarter.

Omdia tabulated $110 billion in chip sales in the first quarter, down from $112 billion in fourth quarter of 2019.

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