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China-Based IC Production to Represent 21.2% of China IC Market in 2026

Thursday, May 19th, 2022

Foreign companies (e.g., Samsung, SK Hynix, TSMC, etc.) are expected continue to comprise more than 50% of IC production in China through 2026

IC Insights’ 112-page May 2Q Update to The McClean Report 2022 is now available for subscribers to download.  It includes a current outlook for the 2022 global economy, detailed market, unit shipment, and ASP forecasts for IC and O-S-D products through 2026, 2021 semiconductor supplier rankings by product type, the 1Q22 top-25 semiconductor supplier ranking, an analysis of the IC market by region with additional focus on the China market, semiconductor R&D spending trends, and an overview of various government-sponsored investment programs targeting the semiconductor industry.

A very clear distinction should be made between China’s IC market and China’s indigenous IC production. IC Insights has often stated that although China has been the largest consuming country for ICs since 2005, it does not necessarily mean that large increases in IC production within China would immediately follow, or ever follow.  As shown in Figure 1, IC production in China represented 16.7% of its $186.5 billion IC market in 2021, up from 12.7% 10 years earlier in 2011.  Moreover, IC Insights forecasts that this share will increase by 4.5 percentage points from 2021 to 21.2% in 2026 (a 0.9 percentage point per-year gain on average).
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Total Microprocessor Sales to Edge Slightly Higher in 2020

Thursday, September 10th, 2020

 

Sales expected to strengthen in 2021 with embedded processors and computer CPUs leading the growth.

Total microprocessor sales are forecast to grow 1.4% in 2020 to nearly $79.3 billion, following a 2.4% decline in 2019, which was the first revenue drop in the worldwide MPU market in 10 years, according to data released in IC Insights’ Mid-Year Update to the 2020 McClean Report.   The mid-year forecast shows total MPU sales strengthening with an 8.8% increase in 2021 to reach a new record high annual level of about $86.3 billion, under the assumption that vaccines become available for the Covid-19 virus and the health crisis diminishes in most regional markets next year.

Figure 1 divides the 2020 microprocessor market by end-equipment categories, based on the Mid-Year Update forecast.


Figure 1

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MCUs Expected to Make Modest Comeback After 2020 Drop

Friday, August 28th, 2020

Economic impact of the Covid-19 virus crisis will cause microcontroller sales to fall the most among major IC product categories in 2020, says Mid-Year Update.

Far-flung microcontrollers used in vehicles, industrial and commercial equipment, home appliances, consumer electronics, and many other embedded systems applications are suffering the most among major IC product categories in the Covid-19 virus health crisis that wrecked the global economy six months ago, according to the Mid-Year Update of IC Insights’ 2020 McClean Report on integrated circuits.  The mid-year forecast shows worldwide MCU sales falling 8% in 2020 to $14.9 billion after dropping 7% in 2019, when the weak global economy lowered the microcontroller market from record-high revenues of $17.6 billion in 2018 (Figure 1).

 Figure 1

Figure 1

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IC Insights Bulletin: Record Amount of IC Capacity Forecast to be Added in 2021

Monday, December 30th, 2019

Ten new 300mm wafer fabs expected to open in 2020, two of them in China.

IC Insights recently released its Global Wafer Capacity 2020-2024 report that provides in-depth analyses and forecasts of IC industry capacity by wafer size, by process geometry, by region, and by product type through 2024.

Typically, the IC industry meets most of its IC unit demand by increasing wafer starts, not by dramatically increasing the number of dice per wafer.  The number of good ICs shipped per wafer increased by an average of only 0.9% annually from 2000 through 2019.  As a result, about 86% of the average annual IC unit volume growth over the 2000-2019 timeperiod (6.5%) was met by increasing wafer starts with 14% attributable to an increase in the number of good dice per wafer.

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China GDP and PMI Contraction A Risk Factor For Global Economy

Wednesday, October 30th, 2019

Potential that China’s economy will break sharply to the downside from its current gradual downward slope .

IC Insights recently released its October Update to The McClean Report 2019.  Part of the update reviewed U.S. and China GDP and PMI trends in light of the current trade friction between the two nations.

Given that the global economy increased by a healthy 3.0% in 2018, it is difficult to comprehend that an economy growing 6% could be considered a risk factor for worldwide GDP growth this year. However, that is the case with China and it’s slowing economic growth. Of concern is that China’s quarterly economic growth will break sharply to the downside from its current gradual downward slope (Figure 1).

Figure 1

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TSMC’s Leading-Edge Fab Investments Set Stage for Sale Surge in 2H19

Wednesday, September 25th, 2019

World’s largest foundry benefits from increasing demand and tight supplies of 7nm devices.

Taiwan Semiconductor Manufacturing Company’s heavy investments in advanced wafer-fab technology are set to pay off significantly for the world’s largest silicon foundry as it continues the production ramp of 7nm ICs in the second half of this year, according to an analysis in IC Insights’ September Update to the 2019 McClean Report.

Figure 1 provides an updated outlook for TSMC’s 2019 sales using quarterly revenue reported by the foundry in first half of this year and IC Insights’ projection for the second half.  As shown, the company has estimated its current full-year sales to be about flat with 2018, but its 2H19/1H19 sales are forecast to jump by 32%—more than three times the 10% growth rate expected for the entire IC industry in the second half of 2019, based on IC Insights’ projection.  There is little doubt that 7nm application processors for new smartphones from Apple and Huawei are driving the forecast for a strong second-half rebound in TSMC’s sales.


Figure 1

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Despite 38% Sales Decline, DRAM Expected to Remain Largest IC Market

Wednesday, July 31st, 2019

NAND flash sales forecast to slide 32%, still ranked third-largest IC market this year.

IC Insights recently released its Mid-Year Update to The McClean Report 2019.  The update included IC Insights’ ranking of the 33 largest IC product categories based on their expected sales and unit shipment volumes for 2019. The 33 IC product categories are those defined by the World Semiconductor Trade Statistics (WSTS) organization.  The five largest IC product categories are shown in Figure 1.

Despite a 38% sales decline expected this year, the DRAM market is forecast to remain the largest of all IC product categories again in 2019 with sales reaching $62.0 billion, down from $99.4 billion in 2018.  IC Insights believes the DRAM market will account for 17% of total IC sales in 2019.  By comparison, DRAM sales accounted for 23.6% of the total IC market in 2018.

Figure 1

Figure 1

The NAND flash market is forecast to slip from second to third position in the ranking this year with total sales falling 32% to $40.6 billion.  Taken together, the DRAM and NAND flash memory categories are forecast to account for 29% of the total $357.7 billion IC market in this year compared to 38% of the total IC market in 2018.
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Semi Content in Electronic Systems Forecast to Drop to 26.4% in 2019

Thursday, July 18th, 2019

Falling IC ASPs to cause semiconductor content to plunge this year after setting a record high of 31.1% last year.

In its upcoming Mid-Year Update to The McClean Report 2019 (to be released at the end of July), IC Insights forecasts that the 2019 global electronic systems market will grow 4% to $1,680 billion. In contrast, the worldwide semiconductor market is expected to drop by 12% this year to $443.8 billion after exceeding the $500.0 billion level for the first time last year.  If the 2019 forecasts come to fruition, the average semiconductor content in an electronic system will drop to 26.4% after setting the all-time record of 31.1% last year (Figure 1).


Figure 1 (more…)

97 IC Wafer Fabs Closed or Repurposed During Past 10 Years

Friday, March 1st, 2019

90% of closures were ≤200mm wafer fabs; greatest number of closures in Japan.

The IC industry has been on a mission to pare down older capacity (i.e., ≤200mm wafers) in order to produce devices more cost-effectively on larger wafers.  In its recently released Global Wafer Capacity 2019-2023 report, IC Insights shows that due to the surge of merger and acquisition activity in the middle of this decade and with more companies producing IC devices on sub-20nm process technology, suppliers are eliminating inefficient wafer fabs. Over the past ten years (2009-2018), semiconductor manufacturers around the world have closed or repurposed 97 wafer fabs, according to findings in the new report.

Figure 1 shows that since 2009, 42 150mm wafer fabs and 24 200mm wafer fabs have been shuttered. 300mm wafer fabs have accounted for only 10% of total fab closures since 2009.  Qimonda was the first company to close a 300mm wafer fab after it went out of business in early 2009.

Figure 1
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Flash Memory Remains Primary Target for Capex Spending

Friday, January 11th, 2019

2019 to be third year of greater than $25.0B in spending for flash, topping both DRAM, foundry.

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 2019, 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 semiconductor capital spending.

The semiconductor industry is expected to allocate the largest portion of its capex spending for flash memory again in 2019, marking the third consecutive year that flash has led all other segments in spending (Figure 1).  Flash memory trailed the foundry segment in capex in 2016, but took an extra-large jump in 2017, growing 92% to $27.6 billion and increased another 16% to $31.9 billion in 2018 as manufacturers expanded and upgraded their production lines for 3D NAND to meet growing demand.  With much of the expansion now completed or expected to be wrapped up in 2019, flash capex is forecast to decline 18% this year to $26.0 billion, which still is a very healthy spending level.


Figure 1

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