HIS iSuppli: Si Foundry Market Likely to Grow 12% YoY This Year

Apr 16, 2012 Ι Industry In-Focus Ι Electronics and Computers Ι By Ken Liu, CENS
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Taipei, April 16, 2012 (CENS)--Increasing electronics content in popular tablets and smartphones like Apple iPad and iPhone as well as in Ultrabook PCs are likely to drive the global silicon foundry market to grow at annual rate of 12% this year, according to market consulting firm IHS iSuppli.

Based on the annual growth pace, the market revenue is estimated to reach US$29.6 billion this year, up from last year's US$26.5 billion, HIS iSuppli reported. This is about triple the level expected for the overall semiconductor industry.

The report indicated that foundry suppliers started to see a steady increase in demand starting late in the first quarter, with revenue expected to peak in the traditionally strong third quarter.

According to HIS iSuppli, the rapid growth of this year represents a major improvement from the tepid 3% expansion in 2011, when industry growth slowed after surging 45% in 2010 following the recession. Unlike last year's sudden slowdown, however, foundry revenue will remain strong in the years ahead, the market-research organization estimated. Revenue will rise another 14% in 2013 to around US$33.6 billion, with solid double-digit growth continuing in 2014- 2015.

IHS iSuppli pointed out that the top-4 pure-play foundries continue dominating the foundry landscape, with the remaining 16 second-tier providers together slicing an insignificant share. The top four are Taiwan Semiconductor Manufacturing Co. (TSMC) with revenue of US$14 billion, United Microelectronics Corp. (UMC) with US$3.6 billion, Globalfoundries with US$3.5 billion and Semiconductor Manufacturing International Corp. (SMIC) with US$1.3 billion.

Both TSMC and UMC are estimated to see revenue for the second quarter surge by over 15% from the first quarter thanks to brisk demands for mobile computing devices, in which electronics contents are increasing sharply. These electronics components, namely microchips, have migrated to advanced process technologies, including 45/40nm processes and 32/28nm processes.

In spite of the bright growth forecast for this year, IHS iSuppli cautions that daunting challenges remain ahead and the global economy will stay as the most critical issue in 2012. The organization believes although conditions in the United States and some Eurozone countries are beginning to improve, growth could still stall for these and other economies dependent on oil, especially in the wake of already high energy prices that could spiral further out of control if tensions remain unresolved in the Middle East.
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