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ChipMaster
Qualcomm is killing it lately, and has become the 3rd lagest chip maker already ...
agk
Many commented on the fab and fab less models of the business.But both have ...
Qualcomm overtakes Intel in market capitalization
Peter Clarke
11/9/2012 11:15 AM EST
LONDON – Qualcomm's standing as the leading supplier of application processors for mobile devices – and the fact that it is fabless – has boosted its market capitalization past Intel Corp., the world's largest chip maker.
San Diego-based Qualcomm is expected to increase its sales by 30 percent in 2012, according to market researcher IC Insights. Qualcomm's annual chips sales are expected to reach about $12.8 billion in annual chip sales, moving it three spots in the researchers' rankings to No. 4.
Although Intel (Santa Clara, Calif.) remains the No. 1 chip maker as measured by sales volume, its standing relies on its dominant position in PCs, a market that is now perceived to be flat at best as consumers embrace smartphones and tablet computers.
Those mobile devices are often powered by Qualcomm's Snapdragon processors.
In the eyes of investors who have driven up its market capitalization, the fact that Qualcomm is a fabless company relieves it of the burden of having to invest billions of dollars each year in process development and wafer fabs.
As a result, Qualcomm's share price stands at $61.83, giving it a current market capitalization of $105 billion. Intel's market capitalization stands at $104 billion based on a share price of $20.96.
According to IC Insights, Taiwan Semiconductor Manufacturing Co.'s market cap is about $84 billion, followed by Texas Instruments at about $33 billion. Micron Technologies is valued at $5.75 billion and STMicroelectronics at $4.9 billion. ST's value is about half that of processor IP licensor ARM Holdings.
Related links and articles:
Qualcomm, Globalfoundries gain in chip sales rankings
Qualcomm grabs half of baseband IC market
ARM, Imagination divvy up MIPS
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dylan.mcgrath
11/9/2012 12:51 PM EST
This really surprised me when I first saw the headline. But I guess, considering trends in mobile computing devices versus PCs, it's really not that much of a shock.
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me
11/9/2012 1:21 PM EST
The roadrunner does fine until he looks down.
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any1
11/9/2012 3:12 PM EST
I believe that the stock market is currently undervaluing Intel and overvaluing Qualcomm. Intel's price to earnings to growth ratio (5 years) is about 0.84 whereas Qualcomm is about 1.12. Given today's stock prices I would put more of my money in the Intel basket than with Qualcomm.
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mobileman1
11/9/2012 5:08 PM EST
Market understands Intel's product roadmap troubles. Qualcomm larger market value might be correct.
Intel killing itself with pursuit of Moore's Law for no business advantage. I can confirm (ex-mobile designer) 14nm is late, not working. 1272/14nm design shuttle tape outs all pushed out due to problems with process.
14nm has many issues and seriously now SOI being possible fix.
At this stage design teams have unstable 0.1 silicon models. No meaningful Baseband processor design can be started based on current state of 14nm.
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resistion
11/9/2012 8:14 PM EST
Intel seems to have delayed 14 nm due to business reasons, first time I've heard this excuse, wouldnt have thought from Intel.
http://www.electronicsweekly.com/Articles/09/11/2012/54972/intel-cuts-training-delays-14nm-raises-fears-for-ireland.htm
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resistion
11/11/2012 9:13 PM EST
Here is the original Irish Times article: http://www.irishtimes.com/newspaper/finance/2012/1109/1224326364155.html
Possibly they are cutting training costs, which means Intel is facing tight money conditions now. Yet a quicker ramp to 14 nm wouldn't help? Maybe 14 nm is a small problem compared to something else..
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peter.clarke
11/12/2012 4:44 AM EST
Interesting stuff Mobileman1
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song-chou-1
11/9/2012 8:35 PM EST
Mr. Resistion,
I hear Intel's engineering team came clean and concluded current approach to 14nm would not work after spending $2B.
Plan was to ship 14nm parts in 2013 and now that plan has been scrapped. 0% chance of shipping a single 14nm chip in 2013.
On top of that Intel marketing this year was claiming 22nm was not competitive in market but "just wait until 14nm".
Intel now plans to to ship LTE chips fabricated at TSMC for next 2 years. However, TSMC is business smart. It is not going to give Intel a good wafer price over its long term customers like Qualcomm that buys many more chips in the chipset (wifi, LTE, RF and SOCs chips) unlike Intel LTE with Atom fabricated by an Intel internal fab.
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resistion
11/9/2012 9:50 PM EST
If Intel's 14 nm process is delayed by at least half-node, they could pull a naming trick (as tsmc has done before), and call it '12 nm', for example.
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song-chou-1
11/9/2012 10:27 PM EST
Calling a delayed 14nm "12nm" is genius.
The foundry naming 14/16nm (i.e. which uses 20SOC 64nm metal pitch) shows how bankrupt the industry is on advancing moores laws.
none (as opposed to their public position)are going to volume production at 14/16nm with no die size reduction and die cost increase.
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sranje
11/10/2012 10:24 AM EST
Qualcomm's market valuation bigger than Intel... Soon Samsung's and even Broadcom's and MediaTek's also?
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George Ou
11/10/2012 11:40 PM EST
AMD have decided that they are going to leave the Semi-conductor market because they know that they can't make competitive products anymore and that Kaveri is a woeful failure and are embarrassed by the conduct of their fanboys.
AMD bankrupt Q1 2014
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John.Donovan
11/12/2012 11:35 AM EST
I can't resist a shout out to Rodney Smith for pioneering the fabless model over hoots from the "Real men have fabs!" camp. The model has long since been validated, but I'm sorry Rodney isn't still around to savor the latest vindication of his vision.
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GroovyGeek
11/12/2012 1:59 PM EST
I am sorry, but the fabless model still relies on SOMEONE having a fab. The whole concept that you can somehow draw excess profit by passing your fab costs on someone else is rather ludicrous. Why would TSMC enable Qualcomm with leading edge process technology if they did not capture a fair portion of the profit? With the fab options of the Qualcomm's of the world shrinking expect to see their wafer costs go up. The fabless model only works for as long as the fab is more or less a commodity.
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song-chou-1
11/12/2012 8:57 PM EST
To GroovyGreek,
My thoughts used to be like you
But I can tell you it is cheaper to buy wafers/chips at foundry then use Intel internal manufacturing.
How can be? Take TSMC 180nm today. TSMC 180nm 1st came on line 10 years ago making Qualcomm modem chips. 10 years later its now used for PMIC and other chips. Between modems and PMIC, many many other chips were made. 10 years from now TSMC will likely still be making chips (analog?, medical device chips? or something else). Compare and contrast to IDM Intel 's 180nm capacity is scrapped. All Intel's 90nm 65nm and 45nm is even scrapped. 32nm is being scrapped soon.
Now think about this. Intel is spending about $30B US dollars to outfit plants for 22nm and 14nm. Just look out 4 years (Intel's roadmap) when it moves to 450mm wafers at 10nm or 7nm . All that $30B will be scrapped in 4 years. What a expense. Foundry is much more efficient since it makes many many more chips over far longer time.
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hazydave
11/13/2012 1:50 PM EST
Also one reason most other companies have given up the Intel practice of short-lived foundries. Intel's business case is kind of an odd-one, anyway... they're after 14nm to keep x86 competitive in mobile against ARM, predicated on the idea of ARM not actually getting even more serious on low power, and of ARM trailing x86 in process. Those were good bets up until now, but then again, Intel is only now starting to nip at ARM's mobile heels.
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Mitesh.Raval
11/19/2012 10:36 AM EST
Intel is too late for mobile just like MSFT. MSFT has however finally got it right and has a nice story going with Xbox, pc, mobile all providing similar UI. Also, msft has caught up to the competition and then some. Intel has a tougher problem to solve. They should spin off the fabs.
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agk
11/21/2012 6:39 AM EST
Many commented on the fab and fab less models of the business.But both have their merits and demerits. So the best is to do the business with both.
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ChipMaster
4/21/2013 12:21 PM EDT
Qualcomm is killing it lately, and has become the 3rd lagest chip maker already [1], with only upside from now on. The only real competitor to them is Samsung now, if they decide to become more serious about dominating the market with Exynos chips. So far they seem to be using them more like "nice to have" chips, only in some of their devices.
[1] - http://techdomino.com/qualcomm-3rd-biggest-chip-maker-by-revenue
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