March 30, 2012 — The worldwide semiconductor foundry market totaled $29.8 billion in 2011, a 5.1% increase from 2010, according to Gartner Inc. IBM Microelectronics and Powerchip Technology jumped up in the top 10 foundry rankings for 2011. Given aggressive foundry spending in 2010 and 2011, oversupply was “inevitable,” Gartner says, as shown in Gartner’s article: Semiconductor capex to fall 11.6% in 2012
The foundry market was “relatively flat” in 2011, following a surge of 40.5% from 2009 to 2010, said Samuel Tuan Wang, research director at Gartner. Foundry customers have largely moved to leaner inventory practices, starting in mid-2011, Wang added. Utilization rates for foundries declined quarter to quarter in 2011. GSA recently reported that Q4 was a surprise, with utilization rates going up, not down, across all chip fabs. The annual average utilization rate dropped to 81% from 91% in 2010, Wang said. Theme of 2011? Top-player domination: the top 5 foundries accounted for almost 80% of market share. TSMC alone held 48.8% of the foundry market, expanding its revenue 2010-2011.
Table. Top 10 companies’ sales revenue from foundry wafer shipments to the world, 2011. ($M). *Samsung revenue does not include ASIC business from Apple. SOURCE: Gartner, March 2012.
|2011 Rank||2010 Rank||Company||2010 Sales||2010 Market
|2011 Sales||2011 Market Share (%)||Year-Over-Year Change (%)|
|Top 10 for 2011||24,795||87.6||26,094||87.7||5.2|
While Samsung’s foundry business ranked #9 with $470 million in revenue, it could have been as hight as #4 if Gartner included the estimated $1 billion in wafer business that Samsung received Samsung Electronics aggressively expanded its LSI business in 2011.
Powerchip shifted its strategic focus from commodity DRAM production to foundry services in early 2011, paying off with a nearly threefold increase in foundry revenue in one year.
The semiconductor supply chain was affected by Japan’s 3/11 earthquake and tsunami, and Thailand’s late 2011 flooding, and US currency’s steep depreciation in 2011. PC production was weak and consumer demand soft, but stable media tablet and mobile phone demand kept semiconductor/foundry revenues at a modest growth rate, said Wang, and demand for mobile electronics will stay high. Communications, consumer, and data processing applications continued to drive foundry revenues in 2011, making up 42.7%, 20.9%, and 20.3% of foundry revenue respectively.
Fabless semiconductor companies made up 77.8% of foundry business, followed by integrated device manufacturers (IDMs) at 20.2%, and system companies.
By region, America’s customers generated 62.8% of the foundry revenue, Asia/Pacific 22.2%, Europe 10%, and Japan 4.9%.
Additional details are available in the Gartner report “Market Share: Semiconductor Foundry Market in 2011.” The report is available at http://www.gartner.com/resId=1952216. Gartner, Inc. (NYSE: IT) provides information technology research and advice.