Insights From Leading Edge

IFLE 222 2014F IC Sales; SMIC joins group Acquiring StatsChipPAC; China to become a Consolidation “Predator”?

By Dr. Phil Garrou, Contributing Editor

IC Insights – 2014 Final Sales Leaders

According to IC Insights, this year’s top-20 ranking includes two pure-play foundries (TSMC and UMC) and six fabless companies.  The top four semiconductor suppliers all have different business models.  Intel is essentially a pure-play IDM, Samsung a vertically integrated IC supplier, TSMC a pure-play foundry, and Qualcomm a fabless company.

fig 1


IC Insights – S. Korean and Taiwanese Companies Control 56% of Global 300mm Fab Capacity

IC companies headquartered in South Korea and Taiwan lead the way in DRAM and flash memory and foundry services.

Samsung and SK Hynix currently account for 35% of global 300mm wafer capacity.  Samsung alone controls about 24% of all the world’s 300mm capacity.   Samsung and SK Hynix also both own big 300mm fabs outside of South Korea.  SK Hynix’s largest fab is in China.  Samsung also has a 300mm fab in China as well as two in the U.S.

Taiwanese companies currently manage 21% of the world’s 300mm capacity, with about 85% of that capacity being committed to foundry services.  The remaining 15% of Taiwan-controlled 300mm capacity is mostly used to produce memory devices.   There is only one Taiwanese-controlled 300mm fab located outside of Taiwan, UMC’s fab in Singapore.

fig 2


SMIC joins group buying STATSChipPAC

Our friends at Digitimes have reported that SMIC has joined the China group of China-based investors looking to buy STATS ChipPAC which includes Jiangsu Changjiang Electronics Technology (JCET).  JCET is China’s largest semiconductor chip tester with five production plants located in the provinces of Jiangsu and Anhui.

In Nov 2014, JCET made a $780 MM offer to acquire STATS ChipPAC. Negotiations are currently scheduled to complete at the end of the year.

Under the proposal, SilTech Shanghai (parent of SMIC) will put $100 MM into the deal. The IC Fund set up by the Chinese government is another co-investor. Incorporated in September 2014, the IC Fund is China’s national investment fund aiming to boost development of the local IC industry.

China to become predator for IC business consolidation during 2016-2020 ?

Digitimes also reports that they expect Chinas next 5 year plan (2016-2020) to reveal “…there is no doubt that China is likely to become one of the major predators for IC businesses during the period”. Further predicting that “…Taiwan-based IC design houses and IC backend service providers are likely to become the preys to be hunted by China-based IC companies.”


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