China gains in 2004 pure-play foundry rankings

China's Grace Semiconductor Manufacturing Corp. (GSMC) demonstrated the fastest growth among all pure-play foundries last year. Grace grew 660 percent in 2004 over 2003, followed by China's He Jian (580 percent) and SMIC (166 percent), according to IC Insights (Scottsdale, Ariz.).

In terms of the top-10 pure-play foundry companies in sales for 2004, Taiwan Semiconductor Manufacturing Co. Ltd. (TSMC) was the world's largest player last year, followed by UMC, Chartered, SMIC, Vanguard, DongbuAnam, HHNEC, SSMC, Jazz and ASMC.

In 2003, TSMC was the leader, followed by UMC, Chartered, SMIC, DongbuAnam, Vanguard, Jazz, HHNEC, SSMC, and X Fab.

In 2003, total pure-play foundry sales increased 36 percent, compared to a total IC market increase of 16 percent, according to IC Insights. In 2004, pure-play foundry sales were $16.7 billion, a jump of 45 percent over 2003, versus a total IC market increase of 28 percent, according to the market research firm.

At the same time, the landscape has changed in the arena. "In IC Insights' opinion, the 'Big 3' pure-play foundries (TSMC, UMC, and Chartered) have now morphed into the 'Big 4' foundries with the addition of China-based SMIC," said Bill McClean, president of the research firm.

"SMIC more than doubled its sales in 2004 to reach almost $1.0 billion. Amazingly, SMIC held 6 percent of the pure-play foundry market in 2004, after holding only 1 percent in 2002," McClean said.

In total, in 2004, the Chinese foundries had sales of over $1.9 billion and held about 12 percent of the worldwide pure-play IC foundry market. Just two years earlier, in 2002, the Chinese foundries had sales of $320 million and held only a 4 percent share of the worldwide IC foundry market, he said.

China, along with other foundry vendors, is taking a bite out of the established players. For example, in 2003, TSMC registered sales of $5.9 billion, but lost 4 percentage points in market share, according to IC Insights.

"TSMC lost another 5 points of foundry market share in 2004 while its sales increased a healthy 31 percent," according to the firm. "TSMC registered significant 2004/2000 increases in both sales and net income while UMC and Chartered struggled."

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