Growing Foundry Market
As the demand of low power system semiconductor chips related to artificial intelligence (AI) and the Internet of Things (IoT) increases, the less-than-40 nanometer (nm) foundry market is recently rapidly growing.
According to market research firm IC Insights on September 24, the less-than-40nm pure-play foundry market is expected to be worth US$21.5 billion (24.5 trillion won) this year, up 18 percent from last year. The estimate far surpasses 7 percent of the total foundry market growth.
Pure play foundries refer to those foundries who only produces semiconductors on consignment basis, without having any in-house design capabilities including memory chips. Samsung Electronics and Intel are excluded from pure play foundries because they also manufacture semiconductors.
IC Insights expects that the sales of TSMC, the number one leading company in the less-than-40nm pure-play foundry market, will be seven times higher than that of GlobalFoundries, UMC and SIMC, which rank second to fourth in the market, and the share of TSMC in the total sales will reach 10 percent, leading the market.
In fact, there is three years of technical gap in fine processing between SMIC, the fourth biggest player in the market, and TSMC and there are only three companies – Samsung Electronics, GlobalFoundries and Intel – that can foundry 10nm chips, except for TSMC.
The industry said the market is expanding due to the increasing demand of low power and high performance system semiconductor chips for not only smartphones but also other devices such as AI and the IoT.
Considering such market atmosphere, Samsung Electronics spun off its foundry operation from the System LSI division to create an independent business unit in May and is holding forums in the United States, Japan and South Korea to actively introduce the competitiveness at home and abroad. An official from Samsung Electronics said, “We are receiving favorable reviews by introducing various spectrums, including fine processing roadmap ranging from 11nm to 4nm and low-power solutions using fully depleted silicon on insulator, or FD-SOI, and magnetoresistive random-access memory (MRAM).”
An official from SK Hynix also said that the number of customer companies has more than doubled after the company spun off its foundry business and the factory is operating at 100 percent capacity. However, he added that the company is still watching the market conditions whether to apply the less than 40nm processing.