Increasing Demand for Hi-Technology Devices Drives the Global Semiconductor Foundry Market, According to New Report by Global Industry Analysts, Inc.

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GIA announces the release of a comprehensive global report on the Semiconductor Foundry markets. Global Semiconductor Foundry revenues are projected to reach US$60 billion by 2018, powered by increasing demand from hi-technology end-devices such as smartphones, tablet PCs, and ultrabooks. Market dynamics are expected to change in future as more number of players ramp up new capacities for leading-edge technologies to meet the growing demand.

Semiconductor Foundry: A Global Strategic Business Report

Follow us on LinkedIn – After peaking at an all-time high in 2010, the global semiconductor foundry market is currently treading a steady yet sluggish growth phase, as foundries take in a cautious approach towards business spending. The prevailing economic uncertainty and weak consumer confidence and the resulting erosion in capital spending are expected to further soften the demand for semiconductors thus impacting the demand for foundry services. Against the backdrop, foundries are expected to tighten capital expenditure even further in 2012. The industry currently offers a mixed bag of opportunities with strong demand for leading edge technologies and precipitating demand for the conventional technology nodes. In the long run, pure-play semiconductor foundries are expected to gain from spurt in hi-fi devices such as smartphones, tablets, and ultrabooks. The unprecedented growth in tablets and smartphones continues to trigger sales of NAND flash memory and logic ASIC (application-specific integrated circuit) semiconductors and thereby 28nm and lower nodes.

Though investments in new fab construction projects seem to remain sluggish in 2012, the ensuing years from 2013 are expected to pick up momentum with new planned projects for leading edge technologies, high on all company agendas. The 28nm node category continues to remain an exception to current demand trough in semiconductor industry owing to its strong value proposition. Most companies are increasing capital spending on 28-nm capacity to ensure enough manufacturing yield to meet customer demands. Since a major share of the 28nm demand is derived from chips for tablets, smartphones, and notebooks, the ongoing spurt in demand for these devices calls for significant investments in 28nm foundry capacities. Eyeing significant demand to emanate from this sector, semiconductor foundries are gearing up their arsenal with capacity expansions and technological advancements so as to effectively and efficiently address the requirements.

A notable trend in the semiconductor foundry market is the growing adoption fabless business model. The economic slowdown led several integrated device manufacturers (IDMs) in 2009 to outsource manufacturing capabilities to semiconductor foundries and there-by adopt a ‘fabless’ business model to achieve greater flexibility and cost efficiency. IDMs are currently shifting towards either contracting directly with semiconductor foundries or spinning off their manufacturing capabilities and subsequently contracting with newly established companies. Both strategies prove beneficial for IDMs in minimizing their earnings volatility by reducing fixed costs. As the economy treads the recovery path, more IDMs are outsourcing semiconductor manufacturing to foundries, primarily in China and Taiwan. The trend is expected to facilitate semiconductor foundries in collaborating on a long term basis with IDMs for the co-development of advanced customized technologies and securing future capacity.

As stated by the new market research report on Semiconductor Foundry, Telecommunications represent the largest and fastest growing application market at a CAGR of 10.3% over the analysis period. Currently, smartphones and tablets comprise the fastest growing application markets for both semiconductor and foundry markets. Further the industry’s continuing shift towards 3G and 4G/LTE handsets is expected to drive revenue gains in the category. Besides the increasing capabilities of smartphones, the growing demand for low-priced smartphones in emerging economies is expected to further spurt sales in the segment. Media tablets are currently becoming a craze in the digital industry, with features such as multi-touch gravity sensors, speech recognition technologies, and others actively being incorporated in product design and introduction cycles.

Region-wise, Taiwan represents the largest and fastest growing semiconductor foundry market worldwide. Taiwan is the leading provider of semiconductor foundry services to various fabless companies and integrated device manufacturers across the globe. The country is home to some of the most prominent pure play chipmakers in the semiconductor foundry sector. In less than a decade, the dynamics between Taiwan's large silicon foundry base and leading integrated device manufacturers (IDM) has shifted dramatically. Taiwan has emerged a major hub for advanced technologies with the pure-play foundry giants investing heavily to meet the global demand for more complex ICs.

The pure-play foundry landscape comprises of 4 foundries in the top tier including Taiwan Semiconductor Manufacturing Corp. (TSMC), followed by UMC, Globalfoundries and Semiconductor Manufacturing International Corp. Future competition in the market is expected to dwell on improvement in chip demand and additional capacity expansions initiated by foundries to meet customer requirements. Major players profiled in the report include Dongbu HiTek Co., Ltd., GlobalFoundries, Inc., Grace Semiconductor Manufacturing Corporation, HeJian Technology (Suzhou) Co., Ltd., Kawasaki Microelectronics, MagnaChip Semiconductor Corporation, Samsung Electronics, Co., Ltd., Semiconductor Manufacturing International Corporation, Taiwan Semiconductor Manufacturing Company Limited, Tower Semiconductor Ltd., United Microelectronics Corporation, Vanguard International Semiconductor Corporation, among others.

The research report titled "Semiconductor Foundry: A Global Strategic Business Report" announced by Global Industry Analysts, Inc., provides a comprehensive review of trends, issues, strategic industry activities, and profiles of major companies worldwide. The report provides market estimates and projections (US$ Million) for global and regional markets including the US, China, Taiwan, and Rest of World. Key Application markets analyzed include Telecommunications, Computers, Consumer Electronics, and Others.

For more details about this comprehensive market research report, please visit –

About Global Industry Analysts, Inc.
Global Industry Analysts, Inc., (GIA) is a leading publisher of off-the-shelf market research. Founded in 1987, the company currently employs over 800 people worldwide. Annually, GIA publishes more than 1300 full-scale research reports and analyzes 40,000+ market and technology trends while monitoring more than 126,000 Companies worldwide. Serving over 9500 clients in 27 countries, GIA is recognized today, as one of the world's largest and reputed market research firms.

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Global Industry Analysts, Inc.
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