Chip companies log highest quarter revenue amidst chip shortage

While chip shortage has sent shocks across industries throughout the world, chip companies have registered overwhelming quarter results.  

Intel has logged the healthiest quarter ever at $19.5 billion, exceeding October guidance by $1.2 billion.

“Q4 represented a great finish to a great year. We exceeded top-line quarterly guidance by over $1 billion and delivered the best quarterly and full-year revenue in the company’s history,” said Pat Gelsinger, Intel CEO, in a statement. “Our disciplined focus on execution across technology development, manufacturing, and our traditional and emerging businesses is reflected in our results. We remain committed to driving long-term, sustainable growth as we relentlessly execute our IDM 2.0 strategy.”  

Samsung Electronics, however, surpassed Intel to lead the chip maker league by revenue in the latest quarter according to industry data.  

“Samsung Electronics regained the top spot from Intel for the first time since 2018, with revenue increasing 31.6% in 2021. Its memory revenue grew 34.2% in 2021, in line with the growth rate of the overall memory market. Intel dropped to the No. 2 position with 0.5% growth in 2021,” stated a Gartner report.  

Chips are embedded in any devices which need to compute or process information, this has led to the ever increasing demand for chips especially due to Covid pushed digitization.    

Worldwide semiconductor revenue grew 25.1% in 2021, exceeding $500 billion for the first time, said Gartner.  

The other factor is the 5G smartphone market and the rapid growth of internet of things which was prevalent even before the pandemic set in, and “forever moves semiconductors ahead of oil as the world’s key commodity input for growth. The current severe chip shortage halting automotive production underscores the speed and scale of this change,” an economic investment firm TS Lombard report said.  

“As the global economy bounced back in 2021, shortages appeared throughout the semiconductor supply chain, particularly in the automotive industry,” said Andrew Norwood, research vice president at Gartner. “The resulting combination of strong demand as well as logistics and raw material price increases drove semiconductors’ average selling price higher (ASP), contributing to overall revenue growth in 2021.”  

Apple, chief executive, Tim Cook said the company does not expect any major change in the way its supply chain operate. Talking at the company’s latest earnings call, Cook said that Apple’s supply chain remains fast moving, leaving very little time between the manufacturing of a semiconductor chip, its packaging and its eventual use in a fully produced device leaving the factory.