Total pure-play foundry market expected to jump 9{1c8721459c474d1d5b48ba9ae7120e36de45aa62207fb48292a0a282be55d27f} this year, up from 6{1c8721459c474d1d5b48ba9ae7120e36de45aa62207fb48292a0a282be55d27f} growth in 2015.
August 23, 2016 — IC Insights released its August Update to the 2016 McClean Report earlier this month. This Update included an update of the semiconductor industry capital spending forecast, a look at the top-25 semiconductor suppliers for 1H16, including a forecast for the full year ranking, and Part 1 of an extensive analysis of the IC foundry industry (the ranking of the top-10 pure-play foundries is covered in this research bulletin).
In 2014, the pure-play IC foundry market registered a strong 17{1c8721459c474d1d5b48ba9ae7120e36de45aa62207fb48292a0a282be55d27f} increase, the largest increase since 2010 and eight points greater than the 9{1c8721459c474d1d5b48ba9ae7120e36de45aa62207fb48292a0a282be55d27f} increase in the worldwide IC market. In 2015, the pure-play foundry market showed a 6{1c8721459c474d1d5b48ba9ae7120e36de45aa62207fb48292a0a282be55d27f} increase, about one-third the rate of growth in the previous year, but seven points higher than the total IC market growth rate of -1{1c8721459c474d1d5b48ba9ae7120e36de45aa62207fb48292a0a282be55d27f}. For 2016, the pure-play foundry market is expected to increase by 9{1c8721459c474d1d5b48ba9ae7120e36de45aa62207fb48292a0a282be55d27f} and greatly outperform the growth rate of total IC market, which is forecast to drop by 2{1c8721459c474d1d5b48ba9ae7120e36de45aa62207fb48292a0a282be55d27f} this year.
Figure 1 shows that the top 10 pure-play foundries are expected to hold 95{1c8721459c474d1d5b48ba9ae7120e36de45aa62207fb48292a0a282be55d27f} of the total pure-play foundry market this year. This year, the “Big 4” pure-play foundries (i.e., TSMC, GlobalFoundries, UMC, and SMIC) are forecast to hold an imposing 84{1c8721459c474d1d5b48ba9ae7120e36de45aa62207fb48292a0a282be55d27f} share of the total worldwide pure-play IC foundry market. As shown, TSMC is expected to hold a 58{1c8721459c474d1d5b48ba9ae7120e36de45aa62207fb48292a0a282be55d27f} marketshare in 2016, down one point from 2015, as its sales are forecast to increase by $2.1 billion this year, up from a $1.5 billion increase in 2015. GlobalFoundries, UMC, and SMIC’s combined share is expected to be 26{1c8721459c474d1d5b48ba9ae7120e36de45aa62207fb48292a0a282be55d27f} this year, the same as in 2015.
The two top-10 pure-play foundry companies that are forecast to display the highest growth rates this year are Israel-based TowerJazz, which is expected to edge-out Powerchip for the 5th spot in the pure-play foundry ranking in 2016, and China-based SMIC, with 30{1c8721459c474d1d5b48ba9ae7120e36de45aa62207fb48292a0a282be55d27f} and 27{1c8721459c474d1d5b48ba9ae7120e36de45aa62207fb48292a0a282be55d27f} sales increases, respectively. TowerJazz and SMIC have been on a very strong growth curve over the past few years. TowerJazz is expected to grow from $505 million in sales in 2013 to $1,245 million in 2016 (a 35{1c8721459c474d1d5b48ba9ae7120e36de45aa62207fb48292a0a282be55d27f} CAGR) while SMIC is forecast to more than double its revenue from 2011 ($1,220 million) to 2016 ($2,850 million) and register a 19{1c8721459c474d1d5b48ba9ae7120e36de45aa62207fb48292a0a282be55d27f} CAGR over this five-year timeperiod.
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