Wednesday, October 14th 2020
China Forecast to Represent 22% of the Foundry Market in 2020, says IC Insights
IC Insights recently released its September Update to the 2020 McClean Report that presented the second of a two-part analysis on the global IC foundry industry and included a look at the pure-play foundry market by region.
China was responsible for essentially all of the total pure-play foundry market increase in 2018. In 2019, the U.S./China trade war slowed China's economic growth but its foundry marketshare still increased by two percentage points to 21%. Moreover, despite the Covid-19 shutdown of China's economy earlier this year, China's share of the pure-play foundry market is forecast to be 22% in 2020, 17 percentage points greater than it registered in 2010 (Figure 1).
Japan is expected to remain the smallest market for pure-play foundry sales with only a 5% share this year (up only two points from its share in 2010). With its foundry market forecast to be worth about $3.6 billion in 2020, Japan's share of pure-play foundry sales is expected to be about 10% the size of the 2020 Americas pure-play foundry market ($35.1 billion).
IC Insights believes that the Japanese market for pure-play foundry services will increase only slightly in the future. The fabless IC company infrastructure in Japan is small and not expected to grow much over the next five years. Therefore, almost all of the growth in foundry demand in Japan is expected to come from a greater number of Japanese IDMs (e.g., Renesas, Toshiba, Sony, etc.), utilizing IC foundry services.
The rise of HiSilicon and other fabless IC companies in China has elevated the demand for foundry services in that country. Figure 2 shows IC Insights' listing of the top pure-play foundries' sales in China in 2018-2020.
In total, pure-play foundry sales in China increased by 10% in 2019 to $11.8 billion, much better than the 1% decline in the total pure-play foundry market last year. Moreover, in 2020, pure-play foundry sales to China are forecast to jump by 26%, seven points better than the 19% increase expected to be registered by the total pure-play foundry market this year.
As shown, UMC showed the highest sales increase into China last year with a 19% jump. This increase was driven by the continued ramp up of its Fab 12X located in Xiamen, China, which opened in late 2016. The fab currently has capacity of 18.7K 300 mm wafers per month. An expansion to 25.0K wafers per month is expected to be complete in mid-2021.
Following a 59% jump in 2018, TSMC's sales into China increased by another 17% in 2019 to $6.9 billion. As a result, the China market was responsible for essentially all of TSMC's sales increase last year with China's share of the company's sales more than doubling from 9% in 2016 to 20% in 2019. In 2020, China-based SMIC and Taiwan-based TSMC are forecast to register strong sales increases in China of 32% and 30%, respectively. For SMIC, a 32% sales increase into China this year would be a big turnaround from the 7% decline in China sales the company logged in 2019.
TSMC had strong sales into China in the second half of last year that were boosted by sales of 7nm application processors to fabless IC supplier HiSilicon. In the first half of 2020, TSMC's sales into China flattened at $2.2-$2.3 billion per quarter. Given that TSMC's device shipments to HiSilicon ended in mid-September, it remains to be seen if that revenue can be replaced in 4Q20 with sales from other China-based companies.
China was responsible for essentially all of the total pure-play foundry market increase in 2018. In 2019, the U.S./China trade war slowed China's economic growth but its foundry marketshare still increased by two percentage points to 21%. Moreover, despite the Covid-19 shutdown of China's economy earlier this year, China's share of the pure-play foundry market is forecast to be 22% in 2020, 17 percentage points greater than it registered in 2010 (Figure 1).
IC Insights believes that the Japanese market for pure-play foundry services will increase only slightly in the future. The fabless IC company infrastructure in Japan is small and not expected to grow much over the next five years. Therefore, almost all of the growth in foundry demand in Japan is expected to come from a greater number of Japanese IDMs (e.g., Renesas, Toshiba, Sony, etc.), utilizing IC foundry services.
The rise of HiSilicon and other fabless IC companies in China has elevated the demand for foundry services in that country. Figure 2 shows IC Insights' listing of the top pure-play foundries' sales in China in 2018-2020.
As shown, UMC showed the highest sales increase into China last year with a 19% jump. This increase was driven by the continued ramp up of its Fab 12X located in Xiamen, China, which opened in late 2016. The fab currently has capacity of 18.7K 300 mm wafers per month. An expansion to 25.0K wafers per month is expected to be complete in mid-2021.
Following a 59% jump in 2018, TSMC's sales into China increased by another 17% in 2019 to $6.9 billion. As a result, the China market was responsible for essentially all of TSMC's sales increase last year with China's share of the company's sales more than doubling from 9% in 2016 to 20% in 2019. In 2020, China-based SMIC and Taiwan-based TSMC are forecast to register strong sales increases in China of 32% and 30%, respectively. For SMIC, a 32% sales increase into China this year would be a big turnaround from the 7% decline in China sales the company logged in 2019.
TSMC had strong sales into China in the second half of last year that were boosted by sales of 7nm application processors to fabless IC supplier HiSilicon. In the first half of 2020, TSMC's sales into China flattened at $2.2-$2.3 billion per quarter. Given that TSMC's device shipments to HiSilicon ended in mid-September, it remains to be seen if that revenue can be replaced in 4Q20 with sales from other China-based companies.
10 Comments on China Forecast to Represent 22% of the Foundry Market in 2020, says IC Insights
Black Death
Floods
and Famine
as well as the Corona doesnt kill off the population first...
Floods = Mostly important for their damage to buildings/facilities. Human losses will be low with adequate response, maybe even material losses could be mostly averted if the Chinese decide to do some crazy engineering of some kind (I mean, they build fake islands on the ocean, so why not?)
Famine = This one is a little harder, but maybe incentives for food imports or advances in their own food production.
Coronavirus = As I understand it, for relatively young people (below 50/60 years old), COVID has low fatality rate.
We are talking almost a billion and half people. A lot of people to kill with three things that have low chance of reaching most of the population and/or they're rather low-fatality rate, while a fourth one could be solved through trade.
raped and pillaged since the UDHR was conceived in 1948.
Not many human rights granted to the millions of civilians killed by the US military across the world.
Neither is there much human rights in the US domestically, where the penal Gulags imprison twice as many per capita than anywhere else in the world. Mostly Black people.
With the flooding - theres a lot of rumors floating that it was a deliberate act by the governing party to wipe out evidence of Cov-19 but other parts of china are also currently flooded.
As for Cov-19 - loads of people died. So much so that China wont even release actual figures. I dont think they even know exactly how many bodies they cremated and they had their crematoriums running 24/7 as well as waste incinerators pulling double duty because the crematoriums were so fully booked.
You give too much credit to the CCP that they'll do the right thing if shit hits the fan, Its been proven many times that they wont.
Anyway - this is an offtopic post so i'll leave it here. If you wish to debate further then pm me.
It's true only when you see it with your own eyes