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Pure-play Foundry Sales in China Expected to Jump by 16% This Year

Published: Oct 06,2017

According to IC Insights that with the rise of fabless IC companies in China, demand for foundry services in that country has also increased. Pure-play foundry sales in China are expected to jump by 16% this year to about $7.0 billion.

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Figure shows IC Insights’ listing of the top pure-play foundries and their sales to China in 2016 and a forecast for 2017. In total, pure-play foundry sales in China are expected to jump by 16% this year to about $7.0 billion, more than double the rate of increase for the total pure-play foundry market.

As shown, only about 10% of TSMC’s sales are forecast to go into China in 2017, yet the company is expected to hold the largest share of the China foundry market this year with a 46% share, up two percentage points from 2016.

The Chinese foundry market represented 11% of the total pure-play foundry market in 2015, 12% in 2016, and is forecast to hold a 13% share this year. As a result of this growth, most pure-play foundries have made plans to locate or expand IC production in mainland China over the next few years.

TSMC, GlobalFoundries, UMC, Powerchip, and, most recently, TowerJazz have announced plans to boost their China-based wafer fabrication production. Most of these new China-based foundry wafer fabs are scheduled to come online in late 2017 or in 2018. UMC began 40nm production at its 300mm joint venture China fab in November of 2016 and the company is planning to introduce 28nm technology into the fab in the second half of this year with additional expansion plans to come through the end of the decade.

It is well known that China is striving to develop an indigenous semiconductor industry but gaining access to the manufacturing technology has become increasingly difficult. As a result, many China IC companies and government entities have structured joint ventures or partnerships with foundry companies in order to access leading manufacturing technology.

The partnerships give Chinese companies much needed access to production capacity using first-rate manufacturing technology and provide the foundries with an ongoing market presence and revenue stream within China.

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