Taiwan to pass Japan as largest source of IC wafer fab capacity

SCOTSDALE, USA: It was not long ago that Taiwan was considered just a provider of back-end (assembly and test) services for the semiconductor industry. However, over the past two decades the country has molded itself to be a primary source of advanced front-end chip manufacturing services.

In fact, an increasing number of IC suppliers are putting their IC fabrication needs entirely in the hands of Taiwanese companies like TSMC, UMC, and WIN Semiconductors. When it comes to IC fabrication, Taiwan is no longer considered merely a second-source for capacity. It is now the only source of fab capacity for many companies.

In IC Insights' newly released Global Wafer Capacity 2010-11 report, it is shown that by mid-2011, Taiwan will surpass Japan as the industry's largest source of IC fab capacity (Fig. 1).

As of mid-2010, there was virtually no gap between the fab capacity levels in Taiwan and Japan. For comparison, in 2006, Japan's industry-leading share of capacity was about 25 percent greater than that of Taiwan.

The new report shows that over the next five years, Taiwan is expected to gain more marketshare with regard to IC fab capacity than any other major country/region. By 2015, Taiwan is predicted to be home to nearly 25 percent of the world's IC fabrication capacity, with Japan coming in second at about 18 percent.

The new Global Wafer Capacity 2010-11 report also shows that Taiwan already has the industry's largest share of capacity for the biggest wafer size (i.e., 300mm). The country also holds the industry's largest share of "not quite leading edge" capacity consisting of 90nm and 65nm process technology "nodes."

This is to be expected, given Taiwan's focus on providing foundry services to a large variety of fabless IC suppliers, "fab-lite" IDMs, and electronic system producers.

Fig. 1Source: IC Insights, USA.