LONDON – The global pure-play semiconductor foundry business will grow 12 percent to $29.6 billion in 2012, up from $26.5 billion in 2011, according to market research company IHS. In 2011, the pure-play foundry market expanded by 3 percent, the firm said.
This is about three times the growth IHS expects for the overall semiconductor market, the company said. Demand has been increasing steadily since late in the first quarter of 2012.
Foundry revenue will remain strong up to at least 2015, according to IHS. Revenue will rise another 14 percent in 2013 to an estimated $33.6 billion, with double-digit percentage growth continuing in 2014 and 2015 (see figure).
Pure-play foundry growth is being driven by demand for portable electronic products including smartphones and tablet computers, said Len Jelinek, director and chief analyst of semiconductor manufacturing at IHS, in a statement. However, foundries will have to contend with a continuing decline in average selling prices (ASP) in light of increased overall competition.
The pure-play foundry landscape has four leading players. Taiwan Semiconductor Manufacturing Corp. (TSMC) with revenue of $14.0 billion, followed by UMC at a distant second with $3.6 billion. The remaining tier one suppliers were Globalfoundries with $3.5 billion, and fourth-placed Semiconductor Manufacturing International Corp. (SMIC) with $1.3 billion. IHS ranked Tower Semiconductor Ltd., with $613.0 million in annual sales, at fifth.
TSMC has more capacity than all of its competitors combined, as well as the financial strength to outspend every one of its rivals, IHS said.
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