While the overall IC industry seems poised for around 10% growth in 2006, the pure-play foundry sector will more than double up that growth rate, up a projected 22% to more than $20 billion, according to a new report from IC Insights Inc.
The “Big Four” foundries — TSMC, UMC, SMIC, and Chartered — continue to rule the sector, accounting for 84% of total worldwide pure-play foundry sales. With more than $10 billion in sales in FY06, TSMC has also cracked the top five in terms of overall chip suppliers (see related story).
Also of note is the complete dominance of foundries in the Asia-Pacific region — nine of the top 10 hail from Taiwan, China, Korea, or Singapore. (The lone non-Asian foundry on the list, Germany’s X-Fab, is slated to merge with Malaysian foundry 1st Silicon sometime this year.)
Flagship Chinese foundry SMIC has crashed the party in the past couple of years and established itself as a top pure-play performer, but IC Insights expects Singapore foundry Chartered Semiconductor Manufacturing will take back the No. 3 spot in the foundry rankings, thanks to its technology alliance with IBM and Samsung.
“Overall, Chartered has done an excellent job over the past two years in establishing important business and technology,” stated the firm, noting that Chartered is currently ramping MPU shipments for AMD and increasing output of video game processors for Microsoft’s X-box machines, and is expected to produce high volumes of leading-edge devices for TI starting next year.
Also notable has been the growth of foundries in China, which has as many spots in the top 10 as Taiwan (three each). With other major mainland foundries not included in the top 10 (ASMC, Grace, CSMC) the nation represented 12.4% of the pure-play foundry market in 2005, up from just 4% in 2002. But IC Insights predicts Chinese foundry market share will only slightly increase to 12.6% this year, as they mature out of the rapid -growth startup phase and assume more moderate growth rates associated with established companies.
IC Insights defines a “pure-play” foundry as a company that does not offer a significant amount of IC products of its own design, but instead focuses on producing ICs for other companies.
Top 10 pure-play foundry companies
(Sales in US $M)
Company……….2004 sales (% vs. 2003)……….2005 sales (% vs. 2004)……….2006 sales[F] (% vs. 2005)
TSMC…………………7648 (+31%)……….8217 (+7%)……….10,085 (+23%)
UMC Group*……….3900 (+42)…………3259 (-16)……………3790 (+16)
Chartered…………..1103 (+52)………….1132 (+3)…………….1570 (+39)
SMIC……………………975 (+166)…………1183 (+21)…………..1465 (+24)
Dongbu………………..228 (+3)……………..347 (+52)………………425 (+22)
Vanguard**………….474 (+66)……………353 (-26)……………….390 (+10)
HHNEC………………..324 (+91)…………..313 (-3)…………………375 (+20)
SSMC**………………..260 (+68)…………..280 (+8)……………….325 (+16)
He Jian…………………230 (+820)…………250 (+9)……………….310 (+24)
X-Fab***……………….177 (+39)…………..202 (+14)……………..300 (+49)
Others………………..1096 (+46)……………969 (-12)…………….1175 (+21)
TOTAL……………..16,415 (+45)……….16,505 (+1)…………..20,210 (+22)
* Includes UMC Japan
**Partially owned by TSMC
***Merging with 1st Silicon in 2006
Source: IC Insights, company reports
Top 10 pure-play foundry companies, market share
(% of total sales)
Company……….2004 market share……….2005 market share……….2006 market share (F)
TSMC……………….47%………50%……….50%
UMC Group……….24%……….20%……….19%
Chartered…………..7%……….7%………….8%
SMIC…………………6%………..7%…………7%
Dongbu……………..1%………..2%…………2%
Vanguard……………3%………..2%…………2%
HHNEC………………2%………..2%…………2%
SSMC………………..2%………..2%…………2%
He Jian………………1%………..2%…………2%
X-Fab………………..1%………..1%…………1%
Others……………….7%………..6%…………6%