Pure-Play Foundry Market Sees Strong Growth in 2020

Article By : EE Times Staff

Application processors and other device sales for 5G smartphones act as a robust driver...

The global IC foundry market is currently witnessing rapid growth. After declining by 1 percent in 2019, the pure-play foundry market is projected to rise by 19 percent in 2020, the strongest growth in six years, according to market research firm IC Insights.


The double-digit growth is driven by the increasing demand for application processors and other telecom devices sales into 5G smartphones. For the year 2020, IC Insights said it expects 200 million 5G smartphone handsets will be shipped, up from only about 20 million units in 2019.

In comparison, market research firm Canalys said it expects global 5G smartphone shipments to reach 278 million units in 2020, with Greater China accounting for 62 percent of shipments, followed by North America, and EMEA. “Smartphone vendors have relentlessly pushed new product launches, as well as online marketing and sales during the post-lockdown period, generating strong consumer interest for the latest gadgets,” stated Canalys senior analyst Ben Stanton. “Gradual reopening of offline stores, improving logistics and production have provided a necessary uplift for most markets to move into a more stabilized second half of 2020. And with the holiday season about to kick off, there is no doubt 5G is about to be thrust into the spotlight.”

Since 2014

If the 19-percent forecast is realized, it would mark the strongest growth rate for the pure-play foundry market since the 18-percent spike in 2014. With the exception of 2019, the only year in which the market dropped was 2009 (-9 percent). IC Insights said it does not expect another pure-play foundry market decline in the forecast period.

(Source: IC Insights)

Over the past 16 years, the pure-play foundry market increased by 9 percent or less in nine years and by double-digit rates in the other seven years. “It appears to have been boom or bust –or at least moderate growth– for the pure-play IC foundry market over the past decade and a half,” commented the market research firm.

In 2020, pure-play foundries will represent 81.4 percent of total foundry sales, down from 89.3 percent in 2014, according to IC Insights. Nonetheless, for the 2019-2024 period, pure-play foundry sales are expected to record a compound annual growth rate (CAGR) of 9.8 percent, up 3.8 points compared to the 6-percent CAGR reported for the 2014-2019 timeframe. The sales forecast is also set to be higher than the 7.3-percent CAGR forecast for the total IC market over the same time period.

In a January report, IC Insights outlined that China was the only region to register pure-play market growth in 2019. China sales indeed increased by 6 percent, while the Americas reported a 2-percent decline. The European and Japanese pure-play foundry markets each displayed a double-digit drop last year.

Pure-Play Foundry Market Growth in 2019 (Source: IC Insights)

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