Rise of China-based fabless IC suppliers offers increased opportunities for foundries.

IC Insights is in the process of completing its forecast and analysis of the IC industry and will present its new findings in The McClean Report 2020, which will be published later this month.  Among the semiconductor industry data included in the new 400+ page report is an in-depth analysis of the IC foundry market and its suppliers.

With the rise of the fabless IC companies in China (e.g., HiSilicon) over the past 10 years, the demand for foundry services has also risen in that country.  Figure 1 shows that the China market was the only major region that showed an increase in pure-play foundry sales last year.  Moreover, the European and Japanese pure-play foundry markets each displayed a double-digit decline in 2019.

Figure 1

China’s total share of the 2018 pure-play foundry market jumped by five percentage points as compared to 2017 to 19%, exceeding the share held by the rest of the Asia-Pacific region by five points.  Overall, China was responsible for essentially all of the total pure-play foundry market increase in 2018.  However, in 2019, the U.S./China trade war served to slow economic growth in China and the country’s foundry marketshare increased only one percentage point last year to 20%.
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