The combined net profit of the world’s top ten semiconductor companies hit a new high from October to December

The combined net profit of the world’s top ten semiconductor companies from October to December 2024 was US$51.7 billion, up 69% from the same period last year. It has hit a new record again in three years. Demand from data centers using generative AI (artificial intelligence) has expanded sharply, and Nvidia’s profits in the United States have increased by 80%. On the other hand, demand for pure electric vehicles (EV) and industrial equipment is sluggish.

The Nihon Keizai Shimbun obtained and counted the financial report data of each company in US dollars through QUICK FactSet (some companies are from September to November or from January to January). From the perspective of final profit and loss, 6 of the 10 companies have improved, and 4 have deteriorated.

Nvidia has seen a significant increase in profits. Net profit increased by 80% to US$22 billion, accounting for 40% of the total. The new semiconductor “Blackwell” for artificial intelligence has begun mass production, and operating income accounts for about one-third of the company’s total. Nvidia CEO Huang Renxun said at the earnings conference that “the demand for Blackwell is extraordinary.” It is reported that the price of this chip is more than 5 million yen in yen.

Nvidia is engaged in chip design business, and the company’s chip foundry is almost monopolized by TSMC, the world’s largest foundry company. TSMC’s net profit increased by 55% to US$11.5 billion, setting a record high for quarterly data.

The demand for high-bandwidth memory (HBM) equipped with AI semiconductors and excellent data transmission speed is also increasing. South Korea’s SK Hynix achieved a profit of US$5.7 billion (a loss of US$1 billion in the same period last year), setting a new profit record. South Korea’s Samsung Electronics’ profit and loss also improved. The growth of AI semiconductors has made up for the lack of demand for personal computer and smartphone chips.

On the other hand, the profits and losses of Intel and Texas Instruments (TI) in the United States have deteriorated. Intel lost US$126 million (a profit of US$2.6 billion in the same period last year), falling into losses again in two years. Intel lags behind its competitors in semiconductor development and fails to win demand from data centers for generative AI. The company’s foundry business in 2021 also failed to fully obtain customers.

Reuters reported that TSMC proposed to several US semiconductor companies to jointly invest in Intel’s factory operating company in the United States.

The demand for semiconductors for pure electric vehicles, which was expected to achieve stable growth, has also fallen into a slump.

Texas Instruments’ sales in both automotive and industrial equipment decreased, with a net profit of US$1.1 billion, a decrease of 12%. The company’s CEO Haviv Ilan said at the earnings conference in late January that “in the automotive field, the market outside China is quite sluggish.” Although the company expanded production by betting on the recovery of demand, the expectations were not met. The inventory turnover days from October to December 2024 are about 100 days, an increase of more than 10 days from the same period last year.

STMicroelectronics of Switzerland also saw a 68% drop in profits. The company provides power semiconductors for voltage control to Tesla and others in the United States. In response to the United States’ tightening of semiconductor export controls on China, China began to produce semiconductors on its own. The increase in supply has led to fierce price competition, which has had an impact on performance.