IC Insights has just released its September Update to The McClean Report, a 30-page report that contains Part 2 of a detailed analysis of the IC foundry market and its players as well as an updated 2014 forecast for the semiconductor industry capital spending outlays by the leading 36 semiconductor companies worldwide. Moreover, the September Update includes the first forecast and discussion regarding 2015 capital expenditures by the top 10 spenders, which currently represent 80% of industry-wide semiconductor capital spending.
Of the Big 4 pure-play foundries (i.e., TSMC, GlobalFoundries, UMC, and SMIC), TSMC is the only one that is expected to have a higher revenue-per-wafer figure in 2014 than in 2010. Of the Big 4 foundries, TSMC is forecast to have the highest revenue per wafer in 2014 at $1,328, 27% higher than GlobalFoundries. In contrast, UMC’s revenue per wafer in 2014 is expected to be only $770, 42% less than TSMC’s revenue per wafer. Although the average revenue per wafer of the Big 4 foundries is forecast to be $1,145 in 2014, the actual revenue per wafer is highly dependent upon feature size.
Figure 1 shows the typical 2Q14 revenue per wafer for select major technology nodes and wafer sizes produced by the Big 4 foundries. As shown, there is more than a 14x difference between the 0.5µ 200mm revenue per wafer ($430) and the 28nm 300mm revenue per wafer ($5,850). Even when normalizing the figures by using the revenue per square inch, the difference is dramatic ($51.77 for the 28nm technology versus $8.56 for the 0.5µ technology).
Although TSMC has a very large percentage of its sales targeting ≤45nm production, its 2014 revenue per wafer is still forecast to be up only 14% when compared to 2009. IC Insights believes that the entrance of GlobalFoundries and Samsung into the high-end foundry market over the past few years has put pressure on TSMC to keep its prices for leading-edge products competitive. Although there will probably be only five foundries able to offer high-volume leading-edge foundry production over the next five years (i.e., TSMC, GlobalFoundries, UMC, Samsung, and Intel), these companies are likely to be fierce competitors and pricing will likely be under pressure as a result.
Before GlobalFoundries entered the foundry market, TSMC was by far the technology leader among the major pure-play foundries. In 2014, 60% of TSMC’s revenue is expected to be from ≤45nm processing. As expected, with GlobalFoundries’ fabs having a large portion of their capacity dedicated to producing AMD’s MPUs over the past few years, its processing technology is skewed toward leading-edge feature sizes. In 2014, 57% of GlobalFoundries’ sales are forecast to be from ≤45nm production.
Although GlobalFoundries is expected to have a similar share of its sales dedicated to ≤45nm technology as TSMC in 2014, TSMC is forecast to have almost 6x the dollar volume sales at ≤45nm as compared to GlobalFoundries this year ($14.8 billion for TSMC and $2.5 billion for GlobalFoundries). In contrast, only 15% of SMIC’s 2014 sales are expected to come from devices having ≤45nm feature sizes, which is the primary reason why its revenue per wafer is so low as compared to TSMC and GlobalFoundries.
As shown in Figure 2, the vast majority of the increase in pure-play foundry sales in 2014 is forecast to be due to ≤28nm feature size device sales. Although it is expected to represent 71% of total pure-play foundry sales in 2014, the >28nm pure-play IC foundry market is forecast to increase only 4% this year. In contrast, the 2014 leading-edge ≤28nm pure-play foundry market is expected to be about $5.1 billion, a 72% increase in size as compared to 2013. Not only is the vast majority of pure-play foundry growth coming from leading-edge production, most of the profits that will be realized come from the finer feature sizes as well.
Report Details: The McClean Report 2014
Many more figures and additional details on the IC foundry market are provided in the 2014 edition of IC Insights’ flagship report, The McClean Report—A Complete Analysis and Forecast of the Integrated Circuit Industry. This highly regarded service features more than 900 pages and more than 400 tables and graphs that provide the user with a thorough analysis of IC industry trends throughout the year. A subscription to The McClean Report includes free monthly updates from March through November (including a 250+ page Mid-Year Update), and free access to subscriber-only webinars throughout the year. An individual-user license to the 2014 edition of The McClean Report is priced at $3,490 and includes an Internet access password. A multi-user worldwide corporate license is available for $6,490.