SCOTTSDALE, USA: Foundry IC sales are forecast to grow at nearly twice the rate of the overall IC industry between 2008 and 2013, according to data released in IC Insights' Mid-Year Update to the McClean Report.
From 2008 through 2013, pure-play foundry sales are expected to display an 11 percent compound annual growth rate (CAGR), almost twice the 6 percent total IC industry CAGR expected during the same timeframe (Fig. 1). Meanwhile, the IDM foundry business is forecast to grow to $6 billion in 2013, representing a 2008-2013 CAGR of 10 percent.
Fig. 1Source: IC Insights, Oct. 2009, USA
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 (e.g., TSMC, UMC, SMIC, Chartered, etc.). Integrated device manufacturer (IDM) foundries are defined as those companies that offer foundry services in addition to their own ICs (e.g., IBM, NEC, Samsung, TI, etc.).
IC Insights expects the pure-play foundry market to fall 16 percent in 2009, to $17.3 billion from $20.6 billion in 2008. However, three consecutive years of 20 percent-plus growth is forecast for the pure-play foundry market from 2010-2012.
Similarly, IDM foundry sales are forecast to fall to $3.2 billion in 2009 from $3.8 billion in 2008 before rebounded strongly through 2012.
Pure-play foundries are forecast to represent about 84 percent of total foundry sales in 2009, up from 81% in 2003. IC Insights believes that the pure-play/IDM foundry business mix will continue to shift slowly toward the pure-play companies even as some IDMs (e.g., Samsung, GlobalFoundries, Toshiba, etc.) increase their emphasis on the foundry market.
The IDMs' most pressing problem with their foundry business segments is expected to continue to be the intense competition from the pure-play foundries. With Chinese foundries SMIC, Grace, Hua Hong NEC, and He Jian attempting to grab shares of the foundry business and the more established foundries of TSMC, UMC, and Chartered all trying to protect and increase their existing marketshares, the business environment (especially pricing) has proven to be very difficult for the IDM foundry.
Moreover, IC Insights believes that the addition of Samsung and GlobalFoundries to the mix of major IDM foundries will serve to put pressure on foundry pricing over the next five years.