Special report
Greater China IC foundry industry overview
Nobunaga Chai, DIGITIMES Research, Taipei
Monday 24 January 2011
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Taiwan's foundry industry will account for an estimated 68.5% of global foundry revenues in 2010. In addition, China will account for 12-13%, bringing the share of Greater China to over 80%. However, the region faces vigorous challenges from industry players such as Samsung Electronics and Globalfoundries, compelling TSMC and UMC to step up their capex for expanding 12-inch wafer capacity and accelerating the pace of R&D. Looking forward, Digitimes Research forecasts that the output value of Taiwan's foundry industry will reach US$22.14 billion in 2013, while the China foundry industry may top US$4.45 billion.
Abstract
Greater China foundries: Revenues and market share, 2007-2011

Digitimes Research estimates that Taiwan's TSMC and UMC ranked first and second worldwide among the world's top 10 foundries in 2010. TSMC's subsidiary Vanguard International Semiconductor also ranked among the top 10.

In addition, Taiwan is home to other foundries such as Episil Technologies, Advanced Microelectronic Products and Maxchip Electronics. Taiwan's foundry industry accounted for an estimated 68.5% of global foundry revenues in 2010. In addition, China accounted for 12-13% of global revenues, bringing the share of Greater China to over 80%.

Of the top 10 semiconductor manufacturers in China, Hynix-STM and BCD Semiconductor Manufacturing are a memory maker and an IDM (Integrated Device Manufacturer), respectively, while the other eight are pure-play foundry players including Semiconductor Manufacturing International (SMIC), Grace Semiconductor Manufacturing (GSMC), Shanghai Hua Hong NEC Electronics (Hua Hong NEC) and Hejian Technology (Suzhou).

While SMIC and GSMC ranked fourth and tenth globally in 2010, China-based foundries tend to be less competitive in cost and are unable to meet demand for leading-edge applications. However, China-based foundries have the advantage of geographical proximity to emerging markets.

Faced with the vigorous challenges of Samsung Electronics and Globalfoundries, TSMC and UMC raised their capital outlay in 2010 for expanding 12-inch wafer capacity and accelerating the pace for the R&D and mass production of cutting-edge technology.

Digitimes Research forecasts that the output value of Taiwan's foundry industry will reach US$22.14 billion in 2013, while the China foundry industry may top US$4.45 billion.

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