With the share of the pure-play foundry market going to China on the rise, foundries are increasing their manufacturing presence there, according to IC Insights.
SAN FRANCISCO — China is expected to account for 13 percent of sales for the world’s pure-play chip foundries in 2017, up from 12 percent last year, as the country’s fabless semiconductor activity continues to accelerate, according to market research firm IC Insights.
Pure play foundry sales in China are expected to reach $7 billion in 2017, up 16 percent from 2016, according to IC Insights. The growth rate is more than double the overall growth rate for global pure play foundry sales, the research firm noted.
TSMC is forecast to hold about 46 percent of the market for China’s pure play foundry sales with sales of about $3.2 billion, up 10 percent from 2016, IC Insights said.
Most pure-play foundries — including TSMC, GlobalFoundries, UMC, Powerchip and TowerJazz — have made plans to locate or expand IC production in mainland China over the next few years, IC Insights noted. Most of these fabs in China are scheduled to begin production late this year or next year, IC Insights said.
China is pushing hard to expand its domestic semiconductor production, with plans to invest more than $160 billion in the industry over the next decade. But IC Insights noted that gaining access to cutting edge manufacturing technology has become more difficult for Chinese firms.
“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,” IC Insights said. “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.”
Examples of these partnerships cited by IC Insights include:
— Dylan McGrath is editor in chief of EE Times.