News Article
Chinese firm begins to threaten the Big Three pure play foundries
Taiwan-based TSMC remains by a long way the world's largest pure-play foundry, with 46% share of the market, twice that of its nearest competitor, fellow Taiwanese company UMC
Taiwan-based TSMC remains by a long way the worlds largest pure-play foundry, with 46% share of the market, twice that of its nearest competitor, fellow Taiwanese company UMC.
But, according to a list of leading pure-play foundries by market analyst IC Insights, TSMCs market share has fallen almost 10% since 2002, even though sales leapt from US$4.7 billion to US$7.6 billion over the same period.
The reason for the reduction in market share is the emergence of a number of new semiconductor companies, lead by SMIC of China. SMICs US$50 million of sales in 2002 only accounted for around 1% of the market.
But by 2004, the company had become a major player. With sales of US$975 million in 2004, the company is only slightly behind third placed Chartered of Singapore (2004 sales: US$1.1 billion) and growing rapidly.
SMIC increased sales by a remarkable 632% in 2003 and the triple digit expansion continued in 2004 with sales growth of 166%.
An IC Insights spokesman said that SMICs extraordinary growth over the past couple of years has propelled it into a major force in the foundry market.
"In our opinion, the Big Three pure-play foundries - TSMC, UMC and Chartered - have now morphed into the Big Four foundries with the addition of China-based SMIC," he said.
SMIC is not the only threat to the three companies that have traditionally dominated the foundry industry. Taiwan foundry Vanguard has built up a 3% market share in just two years and now turns over US$474 million.
But in the longer term, it is Chinese start-ups Grace and He Jian that could have the greatest impact. Both companies grew by more than 500% in 2004 and now command 1% of the market each.
At this rate of expansion, it wont be long before they leapfrog the USs largest pure-play foundry, Jazz (2004 sales: US$235 million) – the only non-Asian company among the top ten largest foundries.
The only other non-Asian firms to make IC Insights list of leading foundries are Israels Tower (15th), with 2004 sales of US$126 million and US-based PolarFab (16th) with US$115 million of sales in 2004.
But, according to a list of leading pure-play foundries by market analyst IC Insights, TSMCs market share has fallen almost 10% since 2002, even though sales leapt from US$4.7 billion to US$7.6 billion over the same period.
The reason for the reduction in market share is the emergence of a number of new semiconductor companies, lead by SMIC of China. SMICs US$50 million of sales in 2002 only accounted for around 1% of the market.
But by 2004, the company had become a major player. With sales of US$975 million in 2004, the company is only slightly behind third placed Chartered of Singapore (2004 sales: US$1.1 billion) and growing rapidly.
SMIC increased sales by a remarkable 632% in 2003 and the triple digit expansion continued in 2004 with sales growth of 166%.
An IC Insights spokesman said that SMICs extraordinary growth over the past couple of years has propelled it into a major force in the foundry market.
"In our opinion, the Big Three pure-play foundries - TSMC, UMC and Chartered - have now morphed into the Big Four foundries with the addition of China-based SMIC," he said.
SMIC is not the only threat to the three companies that have traditionally dominated the foundry industry. Taiwan foundry Vanguard has built up a 3% market share in just two years and now turns over US$474 million.
But in the longer term, it is Chinese start-ups Grace and He Jian that could have the greatest impact. Both companies grew by more than 500% in 2004 and now command 1% of the market each.
At this rate of expansion, it wont be long before they leapfrog the USs largest pure-play foundry, Jazz (2004 sales: US$235 million) – the only non-Asian company among the top ten largest foundries.
The only other non-Asian firms to make IC Insights list of leading foundries are Israels Tower (15th), with 2004 sales of US$126 million and US-based PolarFab (16th) with US$115 million of sales in 2004.
