ARM, United Nova Technology, and Nexchip have been listed as the world’s top 100 highest-valued chip companies in 2023. ARM is the 18th on the list with a market cap of $77 billion while United Nova Technology and Nexchip rank 87th and 89th respectively. United Nova Technology, the largest MEMS foundry in China, has a market cap of $35.4 billion and specializes in wafer foundry, packaging, and testing. On the other hand, Nexchip is the third-largest foundry in China, with a market cap of $34.6 billion, and focuses on manufacturing display driver ICs, microcontrollers, and power management ICs. Both companies went public in 2023.
ARM is a UK-based chip IP vendor that generates the majority of its sales from the mobile sector, which accounts for less than half of the company’s revenue. Despite this, ARM still regards the mobile sector as its main growth driver and has a 99% share of the mobile SoC market. ARM also sees potential in the cloud computing market, where it has a 10% market share largely thanks to Amazon’s Graviton chips. However, the rise of RISC-V, an open-standard instruction set architecture (ISA), and ARM’s newly unveiled business model that focuses on licensed SoC solutions instead of IP licensing has brought some uncertainty to its future prospects.
United Nova Technology, with its headquarters in Shaoxing, China, was founded in 2018 as a joint venture between China’s largest foundry, Semiconductor Manufacturing International Corp. (SMIC), and the government of Shaoxing. The company is the largest foundry in China and the world’s fifth largest in terms of micro-electro-mechanical systems (MEMS). It focuses on wafer foundry, packaging, and testing. Notably, United Nova Technology seeks to seize the trend of domestic substitution in the automotive insulated gate bipolar transistor (IGBT) market as China rises to become the world’s largest market for IGBT and MOSFET, driven by the growth of its new energy vehicle (NEV) industry. The company also acknowledges overcapacity as a potential risk and is diversifying its production line for consumer electronics to address higher-margin markets like NEV, smart grid, and the Internet of Things (IoT).
Nexchip, located in Hefei, Anhui Province, was founded in 2015 as a joint venture between Taiwan-based Powerchip Technology Corp. and Hefei City Construction Investment Group. It is the first 300mm wafer foundry in Anhui Province and focuses on the manufacturing of display driver ICs (DDIC), microcontrollers (MCU), CMOS image sensors (CIS), and power management ICs (PMIC). Nexchip achieved the target to grab the largest market share in DDIC contract manufacturing. The company acknowledges the risk of overconcentration in the DDIC sector and is seeking to diversify into CIS, MCU, and PMIC platforms.
Overall, the inclusion of ARM, United Nova Technology, and Nexchip in the list of the world’s top 100 highest-valued chip companies in 2023 highlights their presence and growth potential in the semiconductor industry. The global semiconductor industry still faces market uncertainty in 2024, but the automotive sector and emerging AI applications are expected to be the future growth drivers. These companies, along with other established players, are well-positioned to contribute to the market recovery.