Silicon foundry business to grow 414% to $36 billion by 2004, says IDC

Silicon foundry business to grow 414% to $36 billion by 2004, says IDC
By Semiconductor Business News
April 14, 2000 (12:54 p.m. EST)
URL: http://www.eetimes.com/story/OEG20000414S0019

MOUNTAIN VIEW, Calif. -- The silicon foundry business will grow from $7 billion in revenues to $36 billion by 2004 as more integrated device manufacturers (IDMs) opt to outsource chip production vs. adding wafer-processing capacity, according to a new industry report from International Data Corp.

The market researcher firm suggested that the 1996-1998 semiconductor recession weakened many fab-operating IDMs, which are now turning to third-party foundries at "an unprecedented rate" for capacity as well as leading-edge processes.

"The surge in strategic outsourcing by integrated manufacturers is being felt by all major dedicatedfoundries and will underpin high growth in the merchant foundry business," said Mario Morales, director of semiconductor research at IDC here. "In fact the rate of value gain is so rapid that foundries seem bound to continue to gain share well into the new century.

"This growth will reshape the future of semicondu ctor manufacturing, and strategic outsourcing will become a long-term solution to the cost penalties of in-house fabrication," he added. IDC estimated that foundries currently produce about 12% of the semiconductors in the world, and by 2004, that share will more than double to 26%.

The "Big Three" pure-play foundries -- Taiwan Semiconductor Manufacturing Co. (TSMC), United Microelectronics Corp. (UMC), and Chartered Semiconductor Manufacturing Ltd. Pte.--collectively account for 69% of today's silicon foundry volume, but their share is expected to grow to 88% by 2004, according to IDC.