Analyses suggest that South Korea’s foundry (semiconductor contract manufacturing) production capacity may decrease somewhat due to the semiconductor competition between China and the United States and the competitive reshaping of supply chains by major global countries.
According to the market research firm TrendForce on Dec. 14, as of this year Taiwan holds about 46% of the global foundry production capacity, functioning as the largest producer. It is followed by China (26%) and South Korea (12%).
However, TrendForce observed that the semiconductor production capacities of Taiwan and South Korea might show a mid-to-long-term decline due to the impact of countries like China and the U.S. expanding their domestic supply chains significantly with government incentives and local production subsidies. By 2027, Taiwan’s foundry market share is expected to drop to 41%, and South Korea’s to 10%.
TrendForce noted that the U.S. is expected to make significant progress in advanced processes, while China’s growth will be notable in mature processes. Under the advanced manufacturing process standard of 16/14 nm and below, Taiwan currently holds 68% of the global foundry market, but this is expected to fall significantly to 60% by 2027.
South Korea’s share is anticipated to rise from 11.5% in 2023 to 13% in 2027, while the U.S. is expected to increase its share from 12.2% to 17% during the same period. However, TrendForce analyzed that more than half of this increase in the U.S. is due to local investments by Taiwan’s TSMC and Samsung Electronics. Furthermore, Japan, which currently does not have a share in advanced processes, is expected to increase its share to about 4% by 2027.
In the case of mature processes of 28 nm and above, Taiwan, which currently holds 44%, is expected to decrease to 40% by 2027, while China’s share is anticipated to grow from the current 31% to 39%, potentially overtaking Taiwan. TrendForce also mentioned that if semiconductor equipment procurement proceeds smoothly, there is a possibility of further growth. South Korea’s market share in mature processes is expected to decrease from the current 6% to about 4% by 2027.
TrendForce stated, “Due to semiconductor shortages and geopolitical risks, fabless customers want to diversify risks by collaborating with multiple foundries, leading to concerns about duplicate orders. The foundry industry also faces challenges such as capacity and price competition, and profitability recovery.”