Technology
Chart: Here’s How 5 Tech Giants Make Their Billions
The Revenue Streams of the Five Largest Tech Companies
The Chart of the Week is a weekly Visual Capitalist feature on Fridays.
Last year, we published a chart showing that tech companies have displaced traditional blue chip companies like Exxon Mobil and Walmart as the most valuable companies in the world.
Here are the latest market valuations for those same five companies:
Rank | Company | Market Cap (Billions, as of May 11, 2017) | Primary Revenue Driver |
---|---|---|---|
#1 | Apple | $804 | Hardware |
#2 | Alphabet | $651 | Advertising |
#3 | Microsoft | $536 | Software |
#4 | Amazon | $455 | Online Retail |
#5 | $434 | Advertising | |
TOTAL | $2,880 |
Together, they are worth $2.9 trillion in market capitalization – and they combined in FY2016 for revenues of $555 billion with a $94 billion bottom line.
Bringing Home the Bacon?
Despite all being at the top of the stock market food chain, the companies are at very different stages.
In 2016, Apple experienced its first annual revenue decline since 2001, but the company brought home a profit equal to that of all other four companies combined.
On the other hand, Amazon is becoming a revenue machine with very little margin, while Facebook generates 5x more profit despite far smaller top line numbers.
Company | 2016 Revenue (Billions) | 2016 Net Income (Billions) | Margin |
---|---|---|---|
Apple | $216 | $46 | 21% |
Alphabet | $90 | $19 | 21% |
Microsoft | $85 | $17 | 20% |
Amazon | $136 | $2 | 2% |
$28 | $10 | 36% |
How They Make Their Billions
Each of these companies is pretty unique in how they generate revenue, though there is some overlap:
- Facebook and Alphabet each make the vast majority of their revenues from advertising (97% and 88%, respectively)
- Apple makes 63% of their revenue from the iPhone, and another 21% coming from the iPad and Mac lines
- Amazon makes 90% from its “Product” and “Media” categories, and 9% from AWS
- Microsoft is diverse: Office (28%), servers (22%), Xbox (11%), Windows (9%), ads (7%), Surface (5%), and other (18%)
Lastly, for fun, what if we added all these companies’ revenues together, and categorized them by source?
Category | 2016 Revenue (Millions) | % Total | Description |
---|---|---|---|
Hardware | $197,020 | 36% | iPhone, iPad, Mac, Xbox, Surface |
Online Retail | $122,205 | 22% | Amazon (Product and Media Categories) |
Advertising | $112,366 | 20% | Google, Facebook, YouTube, Bing ads |
Software | $31,692 | 6% | Office, Windows |
Cloud/Server | $31,396 | 6% | AWS, Microsoft Server, Azure |
Other | $60,177 | 11% | Consulting, other services (iTunes, Google Play), etc. |
$554,856 | 100% |
Note: this isn’t perfect. As an example, Amazon’s fast-growing advertising business gets lumped into their “Other” category.
Hardware, e-commerce, and and advertising make up 76% of all revenues.
Meanwhile, software isn’t the cash cow it used to be, but it does help serve as a means to an end for some companies. For example, Android doesn’t generate any revenue directly, but it does allow more users to buy apps in the Play Store and to search Google via their mobile devices. Likewise, Apple bundles in operating systems with each hardware purchase.
Technology
All of the Grants Given by the U.S. CHIPS Act
Intel, TSMC, and more have received billions in subsidies from the U.S. CHIPS Act in 2024.
All of the Grants Given by the U.S. CHIPS Act
This was originally posted on our Voronoi app. Download the app for free on iOS or Android and discover incredible data-driven charts from a variety of trusted sources.
This visualization shows which companies are receiving grants from the U.S. CHIPS Act, as of April 25, 2024. The CHIPS Act is a federal statute signed into law by President Joe Biden that authorizes $280 billion in new funding to boost domestic research and manufacturing of semiconductors.
The grant amounts visualized in this graphic are intended to accelerate the production of semiconductor fabrication plants (fabs) across the United States.
Data and Company Highlights
The figures we used to create this graphic were collected from a variety of public news sources. The Semiconductor Industry Association (SIA) also maintains a tracker for CHIPS Act recipients, though at the time of writing it does not have the latest details for Micron.
Company | Federal Grant Amount | Anticipated Investment From Company |
---|---|---|
🇺🇸 Intel | $8,500,000,000 | $100,000,000,000 |
🇹🇼 TSMC | $6,600,000,000 | $65,000,000,000 |
🇰🇷 Samsung | $6,400,000,000 | $45,000,000,000 |
🇺🇸 Micron | $6,100,000,000 | $50,000,000,000 |
🇺🇸 GlobalFoundries | $1,500,000,000 | $12,000,000,000 |
🇺🇸 Microchip | $162,000,000 | N/A |
🇬🇧 BAE Systems | $35,000,000 | N/A |
BAE Systems was not included in the graphic due to size limitations
Intel’s Massive Plans
Intel is receiving the largest share of the pie, with $8.5 billion in grants (plus an additional $11 billion in government loans). This grant accounts for 22% of the CHIPS Act’s total subsidies for chip production.
From Intel’s side, the company is expected to invest $100 billion to construct new fabs in Arizona and Ohio, while modernizing and/or expanding existing fabs in Oregon and New Mexico. Intel could also claim another $25 billion in credits through the U.S. Treasury Department’s Investment Tax Credit.
TSMC Expands its U.S. Presence
TSMC, the world’s largest semiconductor foundry company, is receiving a hefty $6.6 billion to construct a new chip plant with three fabs in Arizona. The Taiwanese chipmaker is expected to invest $65 billion into the project.
The plant’s first fab will be up and running in the first half of 2025, leveraging 4 nm (nanometer) technology. According to TrendForce, the other fabs will produce chips on more advanced 3 nm and 2 nm processes.
The Latest Grant Goes to Micron
Micron, the only U.S.-based manufacturer of memory chips, is set to receive $6.1 billion in grants to support its plans of investing $50 billion through 2030. This investment will be used to construct new fabs in Idaho and New York.
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