NVIDIA Surges Ahead, Seizing IC Design Throne from Qualcomm in AI-Driven Inventory Frenzy
NVIDIA has emerged as the new leader in the IC design market, surpassing Qualcomm, thanks to a frenzy of AI-driven inventory stocking. According to a report by TrendForce, the top 10 global IC design powerhouses witnessed a substantial increase in revenue during Q2, reaching a total of US $38.1 billion, reflecting a 12.5% quarterly growth. In this surge, NVIDIA managed to claim the top spot, dethroning Qualcomm and solidifying its position as the world’s premier IC design house, while other companies on the leaderboard remained stable.
The impressive performance of NVIDIA can be attributed to its global transformation and the high demand for generative AI and large language models from internet giants, CSPs, and enterprises. NVIDIA saw a staggering 105% increase in data center revenue, driven by a flood of shipments, including advanced systems like Hopper and Ampere architecture HGX, as well as the high-performing InfinBand. Additionally, the gaming and professional visualization sectors experienced significant growth with the introduction of new products. NVIDIA’s Q2 revenue reached an astounding US$11.33 billion, marking a 68.3% surge and surpassing both Qualcomm and Broadcom.
Qualcomm, on the other hand, faced challenges in Q2 due to diminishing demand in the Android smartphone sector and Apple’s modem pre-purchases, which disrupted the seasonal rhythm. As a result, Qualcomm’s revenue declined by 9.7%, reaching approximately US$7.17 billion. Broadcom also encountered headwinds, despite benefiting from the AI-driven demand for high-end switches and routers. The company faced drops in revenue from server storage, broadband, and wireless sectors, which led to a stagnation in Q2 revenue at around US$6.9 billion.
While NVIDIA soared to the top, other players in the IC design market experienced mixed results. AMD’s Q2 performance plateaued at about $5.36 billion due to a decline in gaming GPU sales and underperforming embedded segment operations. MediaTek, after several quarters of inventory recalibration, witnessed a resurgence with stabilization in components like TV SoCs and Wi-Fi. The company’s Q2 revenue reached a solid US$3.2 billion, driven by urgent TV orders and increasing shipments for mobile phones, smart platforms, and power management ICs.
Marvell faced challenges with a decline in On-Premise Servers and revenue drops in data centers, telecom infrastructure, and enterprise networking. As a result, Marvell’s Q2 revenue dropped by 1.4%, totaling approximately $1.33 billion. Taiwan’s IC design stalwart Novatek thrived during Q2 as customers replenished TV-related inventories and introduced innovative products like OLED DDI. Realtek also reported quarterly growths of 24.7% and 32.6% respectively, benefiting from supply chain restocking of PC/NB-centric ICs.
Looking ahead to Q3, the overall inventory levels across companies present a positive outlook compared to H1. However, there is still caution due to a slump in end-user demand. Nevertheless, the rise of generative AI and large language models has attracted CSPs, internet titans, and private firms, providing a silver lining for the top ten global IC design giants. TrendForce forecasts a continuation of double-digit growth in Q3, with the potential for record-breaking figures.
In conclusion, NVIDIA’s remarkable surge in the IC design market, fueled by an AI-driven inventory frenzy, has resulted in the company surpassing Qualcomm to claim the top spot. While other players faced challenges, the industry as a whole is set to experience continued growth as the demand for AI offerings increases.
