The microprocessor market is very large in revenues ($79b in Q2,$308b in the year to the end of June 2018) and volume (33.4b chips were sold, 8.4b in the quarter)… and growing strongly (27.4% in the quarter, 22.5% in the year). Computer chips are an essential bedrock of the ITC industry – they are the beating heart of all computer usage and digital transformation. All chip areas have grown consistently (see my Figure which shows cumulative annual revenues by quarter since 2004). Note that the memory chip (NAND and DRAM) market peaks every three years – a ‘stochasticism’ based on the introduction of new ‘process’ sizes, which averaged over 25um in 2004 and now average under 25nm.
There are many different type of chip existing within a distinctly different ecosystems (see my Figure above for the revenues and net profits of the ones I track in the last year). The NAND and DRAM market are vital parts of the raw storage market of course. Just as high costs have driven many suppliers to become fab-less, they also prevent most from addressing adjacent markets unless through acquisition. Vendor consolidation is a major feature of our global market (see the machinations of Broadcom); I expect it continue, resulting in two or three (hopefully not just one!) supplier accounting for all of the business in each area. It is even questionable how many new suppliers will have the technical expertise to address the new chip types which develop in the areas of memory, peripherals and processing in future.
Due to the huge costs in building and running chip fabrication plants suppliers are split into specialist manufacturers and those fab-less vendors who commission others to make them, or license their designs for others to make. My Figure above shows how the $308b market was split by vendor status (design/intellectual property v fabrication), market share and processor area.
In the distant future we may well find it easier to recognise the design, fabrication, licensing models of the microprocessor market than the products, software and services on which they are based.