Fabless IC suppliers saw their combined sales register a strong 24% rise in 2020, while IDMs' grew by only 8% on year. Fabless company IC sales accounted for a record-high 32.8% of the worldwide IC sales last year, according to IC Insights.

Over the long-term, IC Insights believes that fabless/system IC suppliers, and the IC foundries that serve them, will continue to be a strong force in the total IC industry landscape with their percentage share of the total IC market expected to reach the mid-30s over the next five years.

In 2002, fabless/system IC company sales accounted for only 13% of the total IC market, IC Insights indicated. With the memory market soaring in 2017 and 2018, a market in which the fabless companies have very little share, the fabless share of the total IC market shrank in both of those years.

However, with the memory market registering significant weakness in 2019, this situation reversed itself with the fabless share of the total IC market jumping 4.1pp that year to 29.9%, IC Insights noted. Driven by a collapse in the memory market, IDM IC sales plunged by 20% in 2019.

Even after including the booming 2017 and 2018 IDM sales increases of 31% and 16%, respectively, the 2010-2020 IDM CAGR was only 3%, 1pp less than the total IC market CAGR during this same timeperiod, IC Insights suggested. In contrast, the average annual growth rate of IC sales from the fabless/system IC companies was 8%, double the total IC market CAGR during this same 10-year timeframe.

Given the typical disparity in the annual growth rates in favor of the fabless/system IC suppliers versus the IDMs, it comes as little surprise that, except in 2010, 2015, 2017, and 2018 fabless/system IC companies increased their share of the total IC market, according to IC Insights.

By: DocMemory
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