TrendForce: American Semiconductor Companies Had a Weird 3Q19

It's been a weird year for those of us who live--by choice or otherwise--in the United States. That's also true for American semiconductor companies, it seems, because TrendForce published a report today explaining how a variety of factors led to declining revenues for most of these businesses in the most recent financial quarter.

TrendForce didn't waste any time with its report: the firm immediately explained that year-over-year revenue declines for Broadcom (-12.3%) and Qualcomm (-22.3%) were at least partly caused by the U.S.-China trade war. Huawei's addition to the Entity List by the U.S. Department of Commerce earlier this year was particularly damaging to the companies because it's their largest customer, TrendForce said.

Broadcom and Qualcomm also saw increasing competition from China-based companies. That's unlikely to change any time soon--China started a 204 billion yuan ($28.9 billion) fund in October to help its semiconductor companies compete with their counterparts from the U.S. of A. Even if the trade war ends soon, Chinese manufacturers seem likely to use chips made in China as soon as they possibly can.

TrendForce said there were two bright spots in the American semiconductor industry, though, and they were AMD and Xilinx. The research firm explained:

As a result of the continuing shortage of Intel CPUs, AMD was able to expand its shares in the notebook and PC markets and subsequently increase its 3Q19 revenue by 9% YoY. On the other hand, all product lines offered by Xilinx showed performance growths, including data centers, industrial solutions, network communications, and automotive solutions. Xilinx kept up its double-digit revenue growth in 3Q19 with an 11.7% increase YoY.

This is just the latest confirmation that AMD's benefited from Intel's struggle to improve supply of its processors. That trend might continue in 2020, too, as companies like Dell are reportedly thinking of switching more of their devices to AMD processors even as Intel's supply woes come to an end. Decisions like that would help make AMD a mainstay in more PCs rather than an option of last resort.

More information can be found in TrendForce's report. Suffice it to say that the semiconductor market looks very different now than it did just a few years--or even quarters--ago. Combine that with changes to the memory market, the industry's shift to 7nm chips and other technological advances and 2020's already shaping up to be an exciting year. Let's just hope things return to normal for the rest of us, eh?