Intel Climbs to Top Spot While Nvidia Cracks Top 5 Amid Semiconductor Industry Challenges in 2023

In the face of a challenging year for the semiconductor industry, American chipmaker Intel managed to ascend to the pinnacle once again, becoming the leading semiconductor vendor by revenue in 2023. Their rise to the top was marked by a significant revenue generation of $48.7 billion, as reported by industry analysts from Gartner. This achievement is noteworthy even though Intel's semiconductor revenue saw a considerable decrease of 16.7% from the previous year.

Intense Competition and Declining Revenues

Intel’s closest competitor, Samsung, experienced an even harsher decline, with its semiconductor revenue plummeting by 37.5% to $39.9 billion. This downturn represented the steepest revenue decline among the world’s top 10 semiconductor vendors.

Nvidia’s Remarkable Growth

On the other end of the spectrum, Nvidia, widely recognized for its prowess in the AI chip market, achieved an impressive milestone by making its debut in the top five semiconductor companies. Nvidia's semiconductor revenue skyrocketed by 56.4%, reaching $24 billion. This growth was primarily fueled by the company’s dominant position in AI chips, an area that has seen increasing demand and application.

Overall Semiconductor Market Downtrend

The semiconductor industry overall didn't escape the economic headwinds, with a decline in worldwide semiconductor revenue by 11.1%, totaling $533 billion in 2023. Within this landscape, the top 25 semiconductor vendors combined faced a collective revenue drop of 14.1%, contributing to 74.4% of the market share, a decline from 77.2% the year before.

The Plight of Memory Products

Memory products, crucial for a multitude of tech devices, were hit the hardest, with a staggering revenue decrease of 37%. Influencing factors included subdued demand and surpluses in channel inventory, with Gartner’s VP Analyst Joe Unsworth highlighting particular weakness in smartphones, PCs, and servers - major consumers of DRAM and NAND memory.

The Few Bright Spots

The nonmemory semiconductor segment managed to fare slightly better, albeit still experiencing a 3% decline in revenue. Despite setbacks, a handful of semiconductor vendors still posted growth, with only nine out of the top 25 reporting increased revenue and some facing double-digit downturns.

Investment Landscape

For those interested in the investment side of the semiconductor industry, some of the top semiconductor ETFs include the VanEck Semiconductor ETF, iShares Semiconductor ETF, SPDR S&P Semiconductor ETF, Invesco Dynamic Semiconductors ETF, ProShares Ultra Semiconductors, and the First Trust Nasdaq Semiconductor ETF. Moreover, other key players in the market are names like Microchip Technology, Micron Technology, Texas Instruments, Qualcomm, NXP Semiconductors, Applied Materials, alongside market leaders Intel and Nvidia.

Intel, Nvidia, semiconductors