The Semiconductor Foundry Market was valued at USD 42.03 billion in 2019 and is expected to reach USD 62.2 billion by 2025, at a CAGR of 6.75% over the forecast period 2020 - 2025. According to applied energy systems, it is found that around 80% of semiconductor development projects are unable to meet their initial production schedules, often due to the foundry's overestimation of their ability to handle complex tasks.
- When it comes to semiconductor manufacturing, the use of analytics can yield accurate insight into equipment health and ensure that the systems are running at peak performance as per requirements.
- Factors driving the growth of the market include sensors, automotive, and AI. Although the growth rate of smartphone unit sales has slowed, demand for smartphones and tablets is a major factor impacting market growth.
- The smartphone bill of materials constitutes the most significant portion of the foundry activity, which includes analog RF, sensors, processors, and wireless. Foundry vendors are also banking on the growth in power electronics, cryptocurrency, and high-performance computing segments. However, Moore’s Law is about to reach its physical limitation and breaking such a barrier is a major challenge for the market vendors.
Scope of the Report
A semiconductor fabrication plant (called a fab or foundry) is a factory where devices such as integrated circuits are manufactured. Depending upon the various application such as consumer electronics, automotive, industrial, semiconductor foundry manufacture the required I/C in different technological nodes such as 7nm,10nm,20 nm, etc., that caters to the specific application.
Key Market Trends
Application in Automotive Sector is Driving the Semiconductor Foundry Market
- The current automotive outlook needs an unprecedented array of innovations that require substantial numbers of electronic devices. Sensors, cameras, and image processors are prerequisites for advanced driver assistance systems (ADAS) in conventional automobiles, to advanced power electronics used in electric vehicles (EVs) and advanced sensor technologies for autonomous "self-driving" vehicles.
- Automotive is attractive for foundries because many devices don’t require leading-edge processes, meaning a large number of vendors can participate.
- New ADAS safety features, such as automatic emergency braking systems (EBS), are attracting car buyers and insurance companies to avoid costly crashes. Also, governments are stepping in the US National Highway Traffic Safety Administration announced that it would require automatic emergency braking as a standard feature on new cars by 2022. The net effect of all this is the creation of a strong demand for automotive electronics.
- Semiconductor Foundries are accelerating their efforts in automotive chip production in preparation for a surge in semiconductors used in advanced driver-assistance systems (ADAS), and autonomous driving.
- All of the major foundry vendors are scrambling to expand their process portfolios for automotive customers. The foundries are seeing a growing demand from automotive IC customers amid the push toward traditional cars with more connectivity features; ADAS, and electric/hybrid vehicles.
North America to Hold the Highest Market Share
- North America will be the major revenue contributor to the market by 2021 as fabless semiconductor companies are the major customers for semiconductor foundries. Fabless companies make exclusively chip designs and market them without a fabrication plant.
- The major fabless companies in the region are AMD, Apple, Broadcom, Qualcomm, NVIDIA, Marvell, and Xilinx. North America is playing a crucial role in advanced semiconductor system design and manufacturing.
- In 2018, fabless companies have made a revenue of USD 100 billion, globally. The estimated contribution to the semiconductor industry is expected to be more than 50% by these companies.
- The semiconductor industry revenue has increased by more than 20% in 2017, and it is expected to grow at the same rate during the forecast period, due to demand from fabless companies. This, in turn, is augmenting the growth of semiconductor foundries market during the forecast period.
The semiconductor foundry market is consolidated due to a major share of the market is occupied by top players. Moreover, due to the high set up cost of the semiconductor foundry new players are finding it difficult to enter the market. Some of the key players include Taiwan Semiconductor Manufacturing Company (TSMC) Limited, Global Foundries, United Microelectronics Corporation (UMC), Semiconductor Manufacturing International Corporation (SMIC), Samsung Group, Dongbu HiTek, Fujitsu Semiconductor Limited, Hua Hong Semiconductor Limited, STMicroelectronics, among others.
- April 2019 - TSMC announced the delivery of the complete version of its 5 nanometers (nm) design infrastructure within the Open Innovation Platform (OIP). This full release enables 5nm systems-on-chip (SoC) designs in next-generation advanced mobile and high-performance computing (HPC) applications, targeting high-growth 5G and artificial intelligence markets. Leading Electronic Design Automation (EDA) and IP vendors collaborated with TSMC to develop and validate the complete design infrastructure, including technology files, process design kits (PDKs), tools, flows and IP, through multiple silicon test vehicles.
- May 2019 - Marvel announced to have entered into definitive agreements to purchase Avera Semiconductor, the Application Specific Integrated Circuit (ASIC) business of Global Foundries. This acquisition brings together Avera Semi’s leading custom design capabilities with Marvell’s advanced technology platform and scale, creating a leading ASIC supplier for wired and wireless infrastructure. The agreements include the transfer of Avera’s revenue base, strategic design wins with leading infrastructure OEMs and a new long-term wafer supply agreement between Global Foundries and Marvell.
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