Top 10 Semiconductor Foundries in the World
Semiconductor foundries are the unsung heroes driving technological advancement. These companies play a pivotal role in crafting the sophisticated chips that power our gadgets, from smartphones to smart homes. Despite their ubiquitous impact, their significance often goes unnoticed. Join us as we delve into the world of chip foundries and unveil the top 10 largest semiconductor foundries shaping the global chip manufacturing landscape.
About Semiconductor foundries
Semiconductor foundries are specialized enterprises in the semiconductor manufacturing sector, primarily tasked with producing integrated circuit chips designed by external companies. These foundries boast advanced manufacturing equipment and technology, allowing for the production of intricate integrated circuits on a large scale. By offering manufacturing capabilities, they enable design companies to concentrate on chip design, marketing, and sales without the need for semiconductor manufacturing equipment or factories.
Key characteristics of semiconductor foundries
1. Advanced manufacturing processes: Foundries typically feature cutting-edge semiconductor manufacturing technology, such as advanced CMOS processes, facilitating the production of high-performance, low-power chips.
2. Massive production capacity: Equipped with large-scale production lines and equipment, chip foundries can simultaneously manufacture multiple chips in a single processing step, ensuring cost efficiency.
3. Quality control and testing capabilities: Foundries implement stringent control measures throughout the production process to ensure that produced chips meet quality standards. Additionally, they offer chip testing services to verify that the chips meet specifications upon leaving the factory.
4. Design support: Some chip foundries go beyond manufacturing services to provide design support, assisting clients in optimizing chip designs to align with specific manufacturing processes.
Semiconductor foundries play a pivotal role in the semiconductor industry, serving as the production foundation for chip designs across various application domains. This fosters the development and innovation of the semiconductor industry as a whole.
Top 10 Semiconductor Foundries in the World
Trendforce has released the latest report on top foundries on June 12, 2024, they monitor the operations of the top chip foundries in the world and rank them quarterly based on revenue.
In the first quarter, the global wafer foundry market showed a weakened trend influenced by multiple factors. Consumer electronics entered the off-season, while demand for automotive and industrial control applications was constrained by external factors such as inflation, geopolitical conflicts, and energy issues. However, driven by CSP giants and enterprise deployments of large language models (LLMs), demand in the AI server sector emerged as a bright spot in the market. Overall, the total production value of the world's top ten wafer foundries decreased by 4.3% quarter-on-quarter to $29.2 billion.
Top 10 global semiconductor foundries by revenue (million dollars) in Q1, 2024
| Ranking | Company | Revenue | Market share | |||
| 1Q24 | 4Q23 | QoQ | 1Q24 | 4Q23 | ||
| 1 | TSMC | 18,847 | 19,660 | -4.1% | 61.7% | 61.2% |
| 2 | Samsung | 3,357 | 3,619 | -7.2% | 11.0% | 11.3% |
| 3 | SMIC | 1,750 | 1,678 | 4.3% | 5.7% | 5.2% |
| 4 | UMC | 1,737 | 1,727 | 0.6% | 5.7% | 5.4% |
| 5 | GlobalFoundries | 1,549 | 1,854 | -16.5% | 5.1% | 5.8% |
| 6 | Huahong Group | 673 | 657 | 2.4% | 2.2% | 2.0% |
| 7 | Tower | 327 | 352 | -7.1% | 1.1% | 1.1% |
| 8 | PSMC | 316 | 330 | -4.2% | 1.0% | 1.0% |
| 9 | Nexchip | 310 | 308 | 0.6% | 1.0% | 1.0% |
| 10 | VIS | 306 | 304 | 0.7% | 1.0% | 1.0% |
| Total top 10 | 29,172 | 30,489 | -4.3% | 96% | 95% | |
1. TSMC (Taiwan Semiconductor Manufacturing Company)
Headquartered in Hsinchu, Taiwan, TSMC is the world's largest semiconductor foundry company, leading the industry with advanced process technology and customized solutions since its establishment in 1987.
Despite challenges from the off-season for consumer electronics such as smartphones and laptops, revenue decreased by approximately 4.1% to $18.85 billion in the quarter, maintaining a market share of 61.7%. Strong demand in AI-related high-performance computing (HPC) sectors benefited the company. It is anticipated that with major clients like Apple entering replenishment cycles and sustained demand for AI servers, revenue in the second quarter is expected to achieve single-digit growth.
Shipments of 3nm accounted for 9% of total wafer revenue; 5nm accounted for 37%; 7nm accounted for 19%. Advanced technologies, defined as 7nm and more advanced technologies, accounted for 65% of total wafer revenue. TSMC's 3nm process is primarily used in smartphones, while AI accelerators commonly utilize 5nm or 4nm processes. In the future, AI chips will also accelerate the transition from 4nm to 2nm. The 2nm process is expected to commence production by the end of 2025, with deliveries and profitability starting in the first half of 2026.
2. Samsung Foundry
A critical division of Samsung Electronics, Samsung Foundry is headquartered in South Korea and offers advanced process nodes, including 5-nanometer and 8-nanometer, owing to its robust R&D capabilities and strategic partnerships.
Affected by the off-season of smartphones and the trend of domestic substitution, revenue from advanced processes and peripheral ICs decreased by 7.2% to $3.36 billion in the quarter. Due to market expectations of slower-than-anticipated restart of smartphone stocking and low capacity utilization of advanced processes, revenue in the second quarter is expected to remain flat or slightly increase.
Regarding chip foundry services, the development of advanced 3nm and 2nm technologies is progressing smoothly, and the yield rate of the 4nm technology has stabilized.
3. SMIC (Semiconductor Manufacturing International Corporation)
SMIC, headquartered in Shanghai, China, stands as mainland China's largest semiconductor foundry, delivering advanced process technologies globally and focusing on research and development to maintain competitiveness.
Benefiting from the trend of domestic substitution in ICs and increased demand for peripheral ICs from Chinese smartphone makers, revenue increased by 4.3% to $1.75 billion in the quarter, with a market share of 5.7%, rising to third place. It is expected that in the second quarter, supported by consumer festivals, revenue will maintain single-digit growth, and the market share is expected to remain third.
Among the silicon wafer sales of SMIC during this period, 8-inch wafers accounted for 24.4%, while 12-inch wafers accounted for 75.6%. It is evident that SMIC's revenue in the first quarter of this year has surpassed that of United Microelectronics Corporation (UMC) and GlobalFoundries for the first time, making it the world's third-largest semiconductor foundry, trailing only TSMC and Samsung. However, SMIC still lags behind UMC and GlobalFoundries in terms of gross profit margin and net profit level.
4. UMC (United Microelectronics Corporation)
Based in Hsinchu, Taiwan, UMC has been a trusted semiconductor foundry since 1980, offering process nodes from 28-nanometer to 90-nanometer and earning industry acclaim for its commitment to quality and reliability.
Shipments increased slightly compared to the previous quarter, but revenue saw a marginal quarter-on-quarter growth of 0.6% to $1.74 billion, with a market share of 5.7%, influenced by a decline in average selling price (ASP).
5. GlobalFoundries
With headquarters in Santa Clara, California, GlobalFoundries is a leading global semiconductor foundry, providing diverse process technologies, such as 14-nanometer, 12-nanometer, and 22FDX, to various industries ranging from automotive to IoT.
Impacted by adjustments in automotive, industrial control, and traditional data center sectors, as well as the seasonal effects in the smartphone supply chain, revenue slipped to $1.55 billion, with a market share contracting to 5.1%.
6. Hua Hong Semiconductor
Also known as HHGrace, Hua Hong Semiconductor, headquartered in Shanghai, China, is among mainland China's largest semiconductor foundries, contributing to the development of China's semiconductor industry through advanced process technology and solutions.
In the first quarter of 2024, the recovery was slow, with revenue inching up by 2.4% to $0.67 billion, holding a market share of 2.2%.
7. Tower Semiconductor
Based in Israel, Tower Semiconductor, commonly known as TowerJazz, specializes in analog and mixed-signal semiconductor manufacturing, providing innovative solutions for automotive, industrial, and aerospace sectors.
The recovery in the first quarter was sluggish amid intense price competition, leading to a 7.1% decline in revenue to $0.33 billion, with a market share of 1.1%.
8. PSMC (Powerchip Semiconductor Manufacturing Corporation)
Headquartered in Hsinchu, Taiwan, PSMC focuses on memory and logic technologies, offering various process nodes and earning recognition for its commitment to quality and reliability.
The recovery in the first quarter was sluggish amid intense price competition, leading to a 4.2% decline in revenue to $0.32 billion, with a market share of 1%.
9. Nexchip
With headquarters in Hefei, China, Nexchip is one of the fastest-growing semiconductor foundries, specializing in specialty processes and providing high-quality semiconductor solutions to customers worldwide.
In the first quarter of 2024, the recovery was slow, with revenue inching up by 0.6% to $0.31 billion, holding a market share of 1%.
10. VIS (Vanguard International Semiconductor)
VIS, a Taiwanese semiconductor foundry headquartered in Hsinchu, focuses on analog and mixed-signal technologies, contributing significantly to the semiconductor industry's sustainable development and technological innovation.
In the first quarter of 2024, the recovery was slow, with revenue inching up by 0.7% to $0.3 billion, holding a market share of 1%.
In conclusion
In the global wafer foundry market, the first quarter was impacted by the off-season for consumer electronics and external challenges. However, demand for AI servers emerged as a bright spot. Leading companies such as TSMC, Samsung Foundry, and SMIC maintained their market positions through different strategies. Tier 2 Foundries like HuaHong Group, Tower, PSMC, Nexchip, and VIS faced challenges of slow recovery and price competition.
It is expected that with the replenishment cycle of new smartphones in the second half of the year and the growth in AI-related HPC demand, the market is poised to gradually recover. However, mature process markets are likely to face continued pressure.
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Disclaimer: This article is provided for general information and reference purposes only. The opinions, beliefs, and viewpoints expressed by the author of this article do not necessarily reflect the opinions, beliefs, and viewpoints of Cytech Systems or official policies of Cytech Systems.
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