© ic insights Analysis | November 09, 2016

Leading-edge leads way in Pure-Play foundry growth

Sales of ICs built using <40nm process technology are forecast to rise 23 percent at pure-play foundries.
TSMC has long been the technology leader among the major pure-play foundries. 1, 54 percent of TSMC’s 2016 revenue is expected to come from <40nm processing. GlobalFoundries, which has dedicated a large portion of its capacity to making advanced processors over the past few years, also generates a large portion of its sales based on leading-edge process technology and feature sizes. In 2016, 52 percent of GlobalFoundries’ sales are forecast to come from <40nm production.

Although GlobalFoundries and TSMC are forecast to have a similar share of their sales dedicated to <40nm technology this year, TSMC is expected to have almost 6x the sales volume at <40nm as compared to GlobalFoundries in 2016 ( USD 15.6 billion for TSMC and USD 2.6 billion for GlobalFoundries). In contrast, SMIC only entered initial production of its 28nm technology in 4Q15, more than three years after TSMC first put its 28nm process into production.

© IC Insights

Because TSMC has a very large percentage of its sales targeting <40nm production, its revenue per wafer is forecast to increase at a CAGR of 3 percent from 2011 through 2016 as compared to a -1 percent CAGR expected for the total revenue per wafer average of GlobalFoundries, UMC, and SMIC over this same timeperiod. Only 2 percent of SMIC’s 2016 sales are expected to come from devices having 28nm feature sizes (the company does not offer a finer feature size at this time), which is the primary reason its revenue per wafer is so low as compared to TSMC and GlobalFoundries.

It is interesting to note that the increase in pure-play foundry sales this year is forecast to be almost entirely due to <40nm feature size device sales. Although it is expected to represent 60 percent of total pure-play foundry sales in 2016, the ≥40nm pure-play IC foundry market is forecast to be flat this year. In contrast, the leading-edge <40nm pure-play foundry market in 2016 is expected to surge by 23 percent, increasing by a hefty USD 3.6 billion.


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