Intel: Regaining the Throne as the World's Largest Chipmaker - Truth or Myth?

Intel: Regaining the Throne as the World’s Largest Chipmaker – Truth or Myth?

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Intel ¿vuelve a ser la empresa de chips más grande del mundo? Sí y no, entonces, ¿hay gato encerrado?

Earlier this week, we saw the first report on how the semiconductor sector ended in 2023, and the data wasn’t good for almost anyone. Chips took a step backward as a whole, and hopes for recovery were pinned on 2024. Now, days later, a second report has emerged, which is even more intriguing as it places Intel as the largest chip company in the world in 2023, while NVIDIA, for example, fell from third to fifth place. So, where’s the catch?

It’s not that there’s a catch, but it’s important to explain that the way the data is collected and considered influences the rankings of revenues and positions within the general semiconductor company rankings. Therefore, let’s examine this second approach and let everyone decide which one best aligns with their perspective on the market.

Was Intel really the largest chip company in the world? Was it truly the largest in 2023?

Since we haven’t even finished the first month of the year and time flies, the data is still valid until the end of the first quarter when the first assessment of 2024 will be made and prices will be adjusted. This new report comes from the research firm Gartner and reveals global semiconductor sector revenues of an impressive $533 billion.

This staggering figure is not as impressive when looking back at 2022 since revenues fell by 11.1%. Alan Priestley, Vice President Analyst at Gartner, states, “Although the cyclical nature of the semiconductor industry returned in 2023, the market suffered a difficult year in which memory revenue experienced one of its worst declines in history.”

He continues, “The weak market performance also negatively affected several semiconductor suppliers. Only 9 of the top 25 semiconductor suppliers recorded revenue growth in 2023, and 10 experienced double-digit declines.”

Key points to consider in Gartner’s report:

– Intel regained the number 1 spot from Samsung, after two years in the second position. Intel’s 2023 revenues came in at $48.7 billion, while Samsung’s reached $39.9 billion.
– NVIDIA’s semiconductor revenues grew by 56.4% in 2023 to a total of $24 billion, propelling the company into the top five for the first time in its history. This is due to its leading market position for Artificial Intelligence (AI) silicon.
– STMicroelectronics climbed three positions to secure the number 8 spot, the same position it held in 2019. Its revenues increased by 7.7% in 2023, largely driven by a strong position in the automotive segment.

What’s the “catch” in Gartner’s report, presenting such different results from other firms?

There isn’t a catch per se; it’s simply another way of accounting for the data, which either includes or excludes various companies and revenues. The way Gartner measured the data is straightforward: it excludes any company that doesn’t design its own chips, meaning it leaves out giants like TSMC, as they are just a factory that takes orders for already-designed products to manufacture silicon.

Moreover, it’s worth noting that after the severe downturn in the memory sector, Intel smartly exited before the collapse. This favored Intel’s climb against Samsung, as although both companies saw reduced revenues, Intel’s decline was less than half of Samsung’s.

All in all, with TSMC excluded from the equation, the result is that Intel is indeed the largest chip company in the world in terms of design, manufacturing, and the number of chips shipped. However, as we saw four days ago, Intel ranks second if only taking manufacturing and shipment into account.

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