Date: 22/09/2020

Pure-play foundry market to expand by 19% in 2020

IC Insights reported the pure-play foundry market to expand by a strong 19% this year driven by growing demand for application processors and other telecomm device sales into 5G smartphones. Where as in 2019 it was down by 1%. IC Insights forecasts 200 million 5G smartphone handsets will be shipped in 2020 up from only about 20 million units in 2019.

The leading vendors in pure-play foundries biz include TSMC, GlobalFoundries, UMC, and SMIC, who does not make and sell any own semiconductor devices. Now they compete with Integrated device manufacturer (IDM) foundries who offer foundry services along with manufacturing their own ICs. Examples of IDM foundries are Samsung and Intel.

The previous high growth for pure-play foundry market was in 2014 where it grew by 18%. IC Insights highlights that in the past 16 years (2004-2019), the pure-play foundry market grew 9% or less in nine years and by double-digit rates in the other seven years.

Other finding by IC Insights include:
Pure-play foundries are forecast to represent 81.4% of total foundry sales in 2020, down from 89.3% in 2014. From 2019 through 2024, pure-play foundry sales are forecast to display a compound annual growth rate (CAGR) of an 9.8%, 3.8 points more than the 6.0% CAGR displayed from 2014 2019 and greater than the 7.3% CAGR expected for the total IC market in the same forecast period.