TSMC & GlobalFoundries In The ≤45nm IC Market Race
Before GlobalFoundries entered the IC foundry market, TSMC was the biggest player in the major pure-play IC foundries.
According to IC Insights' latest research, in 2012, about 37 percent of TSMC's revenue is expected to come from ≤45nm processing.
Also, as you may expect, with GlobalFoundries' fabs producing AMD's MPUs over the past few years, its processing technology is skewed towards leading-edge feature sizes.
GlobalFoundries is expected to have a greater percentage of its sales dedicated to ≤45nm technology than TSMC this year.
But in the ≤45nm market, TSMC is forecast to trounce GlobalFoundries with a sales volume amounting to $6.23 billion. In 2012, GlobalFoundries is expected to net less than half of that, with $2.79 billion sales in this market.
In contrast, China-based SMIC only entered initial production of 45nm technology in early 2012, more than three years after TSMC first put its 45nm process into production. In fact, less than 1 percent of SMIC's 2012 sales are expected to come from devices having ≤45nm feature sizes, which is why its revenue per wafer ($759) is expected to be pretty low this year as compared to TSMC ($1,190) and GlobalFoundries ($1,157).
In 2012, the ≤45nm foundry segment is expected to represent 30 percent of the total pure-play IC foundry revenue, up from 22 percent in 2011. Older technologies, defined as over 0.18µm segments, are forecast to account for only 13 percent of the pure-play foundry market in 2012, down one point from 2011 and two points from 2010.
Only 11 percent of UMC's sales are forecast to be dedicated to ≤45nm technology this year (UMC is offering a 40nm process after bypassing 45nm technology).
In contrast, GlobalFoundries is expected to have almost two-thirds of its sales in 2012 come from ≤45nm technology.
What's more, TSMC is forecast to net $1.8 billion in sales of 28nm devices alone this year, up almost ten times from the $185 million worth of 28nm product the company sold in 2011.
IC Insights still believes that the more profitable foundries will be those that keep at the leading edge of the process technology roadmap. This, for example includes GlobalFoundries' move to begin foundry production using 14nm FinFET IC technology in 2014.
This could be accomplished through joint ventures and licensing agreements such as the partnership between IBM and GlobalFoundries or through significantly increasing R&D spending to develop advanced technology, as TSMC has done.
The table below shows the importance of major IC foundries being able to offer leading edge IC process technology. There is a clear correlation between the percentage of sales a major foundry has had over the past 18 months for advanced IC devices and its net income percentage.
In 2012, TSMC and GlobalFoundries were in high-volume production of devices using 28nm feature sizes. Although many of the pure-play foundries other than the Big 4 focus on specialised processes and technology, the process technology gap between the other significant pure-play IC foundries and the leading-edge producers is enormous.
Of the 14 pure-play foundries ranked 5th to 18th, only TowerJazz, Grace/HHNEC, Dongbu, and Xinxin are expected to be able to produce ICs using ≤90nm feature sizes in 2012, and this production is likely to be relatively limited.
Collectively, these 14 "non-major" IC foundries are forecast to account for $4.6 billion in sales, or about 15 percent of the total pure-play IC foundry market in 2012.
