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Foundry sales in China expected to jump by 16% this year, with TSMC leading the pack

The Chinese foundry market represented 11% of the total pure-play foundry market in 2015, 12% in 2016, and is forecast to hold a 13% share this year, IC Insights said.

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TSMC is expected to hold the largest share of the China foundry market this year with a 46% share. (Photo courtesy of TSMC)

TSMC is expected to hold the largest share of the China foundry market this year with a 46% share. (Photo courtesy of TSMC)

TAIPEI (Taiwan News)--Pure-play foundry sales in China are expected to jump by 16% this year to about US$7 billion, more than double the rate of increase for the total pure-play foundry market, according to data recently released by the semiconductor market research company, IC Insights.

According to IC Insights data, only about 10% of TSMC’s sales are forecast to go into China in 2017, yet the company is expected to hold the largest share of the China foundry market this year with a 46% share, up two percentage points from 2016.

Foundry sales in China expected to jump by 16% this year, with TSMC leading the pack

(Photo courtesy of TSMC)

The Chinese foundry market represented 11% of the total pure-play foundry market in 2015, 12% in 2016, and is forecast to hold a 13% share this year, IC Insights said.

As a result of this growth, most pure-play foundries have announced plans to locate or expand IC production in mainland China over the next few years, including TSMC, GlobalFoundries, UMC, Powerchip, and, most recently, TowerJazz, IC Insights said.

Most of these new China-based foundry wafer fabs are scheduled to come online in late 2017 or in 2018. UMC began 40nm production at its 300mm joint venture China fab in November of 2016 and the company is planning to introduce 28nm technology into the fab in the second half of this year with additional expansion plans to come through the end of the decade. TSMC started construction on a wholly owned $3 billion fab in Nanjing, China that will serve as a foundry that manufactures ICs using 16nm technology. Production is scheduled to begin in the second half of 2018. GlobalFoundries joined with the Chengdu Government in the first quarter of 2017 to begin building a 300mm wafer fab that will manufacture ICs using mainstream 130nm and 180nm processes. Completion is set for early 2018.

It is well known that China is striving to develop an indigenous semiconductor industry but gaining access to the manufacturing technology has become increasingly difficult, according to IC Insights. As a result, many China IC companies and government entities have structured joint ventures or partnerships with foundry companies in order to access leading manufacturing technology, the semiconductor market research company said.

The partnerships give Chinese companies much needed access to production capacity using first-rate manufacturing technology and provide the foundries with an ongoing market presence and revenue stream within China.