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Pure-Play semiconductor foundry market set for 12 percent growth in 2012, says IHS iSuppli

April 11, 2012 // Julien Happich

Pure-Play semiconductor foundry market set for 12 percent growth in 2012, says IHS iSuppli

Increasing electronics content in popular tablet and smartphone devices like the iPad and iPhone and in Ultrabook PCs will drive accelerated growth for the global semiconductor foundry business this year, according to an IHS iSuppli Semiconductor Manufacturing and Supply Market Tracker report from information and analytics provider IHS.

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Revenue in 2012 for pure-play foundry suppliers is forecast to grow to $29.6 billion, up a brisk 12 percent from $26.5 billion in 2011. This is about triple the level expected for the overall semiconductor industry. Foundry suppliers started to see a steady increase in demand starting late in the first quarter, with revenue expected to peak in the traditionally strong third quarter.

The rapid growth this year is a major improvement from the tepid 3 percent expansion in 2011, when industry growth slowed after a blistering 45 percent surge in 2010 following the recession. Unlike last year's sudden slowdown, however, foundry revenue will remain strong in the years ahead. Revenue will rise another 14 percent next year to an estimated $33.6 billion, with solid double-digit growth continuing in 2014 and 2015, as shown in the figure attached.

Foundries are manufacturers that produce semiconductors for fabless firms, i.e., companies that dont operate their own semiconductor-manufacturing facilities. This years notable performance is a result of the widespread growth of consumer-related products requiring advanced technology for low-power applications, said Len Jelinek, director and chief analyst of semiconductor manufacturing at IHS. For such applications, the overall number of semiconductorsor semiconductor contentmust grow in order to support the more sophisticated functionalities.

Among the products that will increase their semiconductor content this year are hot portable devices like tablets, such as the industry-leading iPad; smartphones, including those from Apple as well as Google Android handsets; and ultrabooks, a key new device that many companies hope will drive fresh growth.

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