Foundries to handle more integrated circuit production
More integrated circuit suppliers are deciding to outsource IC production to avoid the high costs of building fabs
By James Carbone -- Purchasing, 11/19/2009 2:00:00 AM
Semiconductor buyers will need to monitor the manufacturing capabilities, financials and investments plans of semiconductor foundries closely over the next four years as more chip suppliers will adopt a "fab-lite" model and outsource more chip production to foundries.
More integrated circuit suppliers are deciding to outsource IC production to avoid the high costs of building fabs, which can cost $3–4 billion. As a result, foundry sales will grow at nearly twice the rate of the overall IC industry between 2008 and 2013, according to researcher IC Insights.
From 2008 through 2013, pure-play foundry sales will have an 11% compound annual growth rate (CAGR), almost twice the 6% total IC industry CAGR expected during the same timeframe.
The pure-play foundry market will fall 16% in 2009 to $17.3 billion. However, three consecutive years of 20%-plus growth is forecast for the pure-play foundry market from 2010–2012.
Pure-play foundries are forecast to represent about 84% of total foundry sales in 2009, up from 81% in 2003. Integrated device manufacturers (IDMs) account for the rest of foundry sales. A pure-play foundry does not offer a significant amount of IC products of its own design, but focuses on producing ICs for other companies. TSMC, UMC, SMIC,
Chartered are examples of pure-play foundries. IDMs are semiconductor suppliers that offer foundry services in addition to their own ICs. IBM, NEC, Samsung, TI are companies that provide such services.
IC Insights says the pure-play/IDM foundry business mix will continue to shift slowly toward the pure-play companies.
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