Semiconductor Foundries Expected to Grow Rapidly by 19% This Year

Source: IC Insights

[Asia Economy Reporter Changhwan Lee] An analysis has emerged indicating that the growth trend in the semiconductor foundry (contract manufacturing) market continues.

According to market research firm IC Insights on the 26th, the pure foundry companies are expected to achieve a growth rate of 19% compared to the previous year. This is the highest growth rate since 2014. Pure foundries are companies that focus solely on foundry services, like TSMC and GlobalFoundries, without engaging in other businesses.

On the other hand, integrated device manufacturers (IDMs) such as Intel and Samsung Electronics primarily produce semiconductors for their own use or for external sales, while simultaneously operating foundry businesses and various other semiconductor sectors.

This year, pure foundries are expected to see significant growth compared to last year's -1% growth rate. This is interpreted as a result of increased sales of electronic devices due to the spread of COVID-19 and the expansion of the 5G smartphone market.

The share of pure foundries in the overall foundry market this year is 81.4%, down from 89.3% in 2014. This decline is analyzed to be influenced by the entry of IDMs like Samsung Electronics into the foundry market.

Nevertheless, the growth trend of pure foundries is expected to continue over the next few years. IC Insights forecasts that pure foundries will show a compound annual growth rate (CAGR) of 9.8% over the next five years, which is higher than the 6.0% average annual growth rate from 2014 to 2019.