© IC Insights Analysis | January 16, 2020
China only region to register pure-play foundry market growth
Rise of China-based fabless IC suppliers offers increased opportunities for foundries, IC Insights states in a recent report.
With the rise of the fabless IC companies in China (e.g., HiSilicon) over the past 10 years, the demand for foundry services has also risen in that country, Above shows that the China market was the only major region that showed an increase in pure-play foundry sales last year. Moreover, the European and Japanese pure-play foundry markets each displayed a double-digit decline in 2019. China’s total share of the 2018 pure-play foundry market jumped by five percentage points as compared to 2017 to 19%, exceeding the share held by the rest of the Asia-Pacific region by five points. Overall, China was responsible for essentially all of the total pure-play foundry market increase in 2018. However, in 2019, the U.S./China trade war served to slow economic growth in China and the country’s foundry marketshare increased only one percentage point last year to 20%. In total, pure-play foundry sales in China jumped by 42% in 2018 to $10.7 billion, more than 8x the 5% increase for the total pure-play foundry market that year. Moreover, in 2019, pure-play foundry sales to China increased by 6%, eight points better than the 2% decline registered for the total pure-play foundry market last year. In 2019, Taiwan-based pure-play foundry TSMC stated that about 25% of its 400+ customers are based in China. TSMC and UMC each registered double-digit sales increases to China last year. UMC showed the highest sales increase into China with a 19% jump. This increase was driven by the continued ramp up of its 300mm Fab 12X located in Xiamen, China, which opened in late 2016 and has a current capacity of about 22.7K 300mm wafers per month. In contrast, it appears that many of China-based SMIC’s Chinese customers encountered slow business conditions. SMIC’s 2019 sales in China dropped by 8% as compared to a total company sales decline of 7% last year.