US: largest and significant booming during the pandemic but slowing down aftermath. 

Apple is the leader in revenue in the technology hardware industry. But Samsung is quite comparable in size to Apple.

Within the SP500 IT companies, Apple led in total revenue but not in profit margin, MSFT is better in operating margin than Apple.

A revenue breakdown shows Apple’s gross margin is 46% in 2024, fallen substantially from the 56% of iPhone in 2007-10. COGS is still the major cost driver, accounts for more than 50% of revenue. 

The GICS industry classification happen to have a sub-industry named semiconductors that so we can use. Where to look for semi-conductor suppliers? Let us check out the countries with the strongest semiconductors industry.

Bar chart shows more clearly their relative sizes. US is the no 1 in revenue, far bigger than other countries. Taiwan and China are 2nd and 3rd  in semiconductor. Followed by South Korea, Netherland, Germany, Japan, …

US semiconductors is the largest and most profitable, and also growing fast especially during COVID. Taiwan is second in size and profit, Taiwan overtook US in net income. China is large but less profitable.

US semiconductors: top 4 companies accounted for ~40% of market share, relatively competitive and has lots of choices … The major players are Nvidia, Intel, Qualcomm, TXN, Broadcom, AMD ...

Taiwan semiconductors: a dominant player (TSM) + lot of choices. The market is becoming more concentrated. Major players: TSM, ASE, and MediaTek.

Globally, TSM is the largest ...

Considering size and diversity, some potential suppliers for the CPU of iPhone could be TSM, NVDA, Intel, Qualcomm, Broadcom, AMD, TXN, and Gobalfoundries, …

Two groups: (1) INTC, AMD, GFS: lower pricing, hardly profitable (2) TXN, Broadcom & TSM higher pricing very profitable. TSM: most profitable w/ lowest pricing relative to TXN, QCOM, and Broadcom.

Trend analysis provides a more comprehensive picture: (1) Intel suffered huge declines in revenue and profit in recent years (2) AMD overtook Intel in profitability and ROA (3) GFS has been losing money for many years but recently started to break even.

TSM maintained the lowest gross margin (lowest pricing) but highest net margin for all these years. That means TSM is operationally most efficiency so it can maintain the lowest operating expenses.

Breaking down these companies’ total assets by liabilities and stockholder equity, we can see that all suppliers are healthy with relatively low liabilities. Although Broadcom had the highest liabilities (~60% of total assets), it's still healthy.

A more comprehensive and detailed enterprise comparison can give us more insights into both short-term and long-term risks for these companies, such as the current ratio (ability to pay short-term obligations using its current assets), quick ratio (current ratio excluding inventory), liability asset ratio, and long-term debt ratio. For instance, Texas Instruments has the least short-term risk but relatively high long-term risk. AMD has the least long-term risk and moderate short-term risk. Broadcom has, relatively, the highest long-term and short-term risks. TSM has, relatively, moderate long-term and short-term risks.

These insights can be confirmed and expanded for multiple years by the enterprise trend analysis. Most notably, TXN’s high current ratio and quick ratio (implying lower short-term risk) are observed consistently for recent years. Broadcom’s high long-term debt ratio and liability asset ratio are also consistent over time, the same observation can be made for QCOM. We further observed that AMD has significantly reduced its long-term debt ratio and liability asset ratio in recent years.

Three kinds of semiconductors: IC designer such as AMD and Broadcom, IC fabricator such as TSM and GFS, IC designer and fabricator such as Intel, TXN and QCOM.

Semiconductors manufacturers with top production capacity (PPE): Intel > TSM >> all others. Except Intel and TSM, all other suppliers may not have enough production capacity even for themselves.