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Press Release


TSMC Steadily Ahead in Technology and Will Lead Asian Foundries to Achieve US$40 Billion in Revenue Next Year, Says TrendForce

Wednesday , 12 / 09 / 2015 [ Analysts: TrendForce ]

According to global market research firm TrendForce, the combined revenues of major Asian semiconductor foundries are projected to exceed US$36 billion for 2015, up 4~5% year on year. These foundries now account for over 80% of the global foundry revenue and are poised to achieve US$40 billion in revenue next year.

In 2016, IC design houses will be facing declining prices and order cutbacks from downstream clients on account of slowing growth in the smartphone market and flat PC shipments. Pressures on the IC design industry in turn will affect the margins and capacity utilization rates of foundries. Much of the next year’s market demand will come from Apple and Chinese IC design companies, and Asia will continue to be the center of competition among foundries.

The following is a brief analysis on performances and pursuits of major Asian foundries in 2016:

TSMC: Foundry giant will be the chief market growth driver in 2016 as it maintains its lead in advanced manufacturing technology

TSMC has been on top this year in both technology and capacity. Its strengths were especially on display when the A9 processors it produced for Apple were reported to perform better compared with the counterparts made by Samsung. Thus, TSMC’s position among clients worldwide is firmly cemented. TrendForce estimates TSMC’s total revenue for 2015 to reach US$26~27 billion, and its total revenue for 2016 may hit US$30 billion. Looking ahead to 2016, TSMC is likely to grab most of the orders for Apple’s upcoming application processor (referred here as “A10”). The foundry giant will also benefit from the rising demand for products made on the 16nm process. TSMC’s capex for next year is expected to increase significantly to US$9.5~10.5 billion, and most of this spending will be used on expanding the 12-inch wafer capacity and R&D on the 7/10nm technology.

Taking an optimistic view of the growth potential of IC design market in China, TSMC also announced on December 7 that it will build a 12-inch wafer fab in Nanjing. TSMC is the sole owner of this venture and will be investing around US$3 billion. The fab is scheduled to be in operation by the second half of 2018 and its initial capacity is planned at 20,000 wafers per month on the 16nm process. 

UMC: Taiwanese foundry will step up R&D on the 14nm technology and focus on the Chinese market

TrendForce estimates UMC’s total revenue for 2015 to reach US$4.5~4.7 billion, and its total revenue for 2016 is forecast around US$5 billion. UMC’s revenue growth for next year will be mainly attributed to its 28nm process, which is expected to widen the foundry’s technological lead over its trailing competitors as well as helping the foundry to make inroads in the Chinese market.

Much of UMC’s capex for next year is allocated to R&D on the 14nm technology and 12-inch wafer capacity expansion (which will include the fabs in Taiwan as well as the fab in Xiamen, China). The newly built Xiamen fab is also going to be in operation ahead of schedule in the second half of 2016. The initial capacity will be 6,000 wafers per month on the 40/55nm processes. The Xiamen fab furthermore will help expand UMC’s business in China, where the foundry has set its sights on markets for the low-end and mid-range smartphone chipsets and display driver ICs. In the future, UMC also plans to use the Xiamen fab in its migration to the 28nm technology.

SMIC: Chinese foundry will concentrate its efforts on raising the 28nm yield as its revenue growth is supported by government policy

The progress that SMIC (Semiconductor Manufacturing International Corp.) made on its 28nm technology has exceeded the market’s expectations and will come to fruition by 2016. Technology maturation will give SMIC a local advantage in terms of product yield rate and quality (at least until its foreign competitors have set up new fabs in China). TrendForce forecasts SMIC’s total revenue for 2015 to come in around US$2.1~2.3 billion. For next year, the Chinese foundry may achieve about US$2.5 billion in revenue.

As for its capex strategy, most of SMIC’s capital spending next year will be on capacity expansion for its 8-inch wafer fab in Shenzhen and 12-inch wafer fab in Beijing. The Beijing fab in particular will increase its capacity from 5,000 to 10,000 wafers per month.

Samsung: South Korean powerhouse will continue to challenge TSMC in leading-edge manufacturing

Samsung’s foundry business is expected to get fewer orders for Apple’s next smartphone chipset than TSMC next year due to the fact that the Samsung version of A9 processor was not favorably received by consumers. Sales of Samsung’s high-end smartphones are projected to slow next year as well. This in turn will also drag down the revenue growth of the company’s foundry unit. TrendForce estimates Samsung’s foundry revenue to be around US$2.4~2.5 billion for 2015. Next year’s total revenue may reach US$2.5 billion. In terms of capex, Samsung’s System LSI division is projected to have spent around US$4~$5 billion for this year. Capex is expected to drop next year, however, as the company’s foundry business decelerates its capacity expansion of the 14/10nm technology.

TrendForce’s recent analyses find that the Chinese semiconductor policy aims to build a domestic memory industry. Acquisitions and mergers made this year by Chinese companies have accelerated the process as well as putting increasing pressure on Samsung’s memory business.

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2016 Tech Trend Forecast semiconductor Capital expenditure Wafer Foundry IC design Smartphone PC China Apple TSMC processor UMC SMIC Samsung

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