Second-tier foundries make ground on TSMC, Samsung
Panic buying of chips persisted in the 2Q21 and was ascribed to post-pandemic demand, 5G cellular communications roll out, geopolitical tension and chronic chip shortages. With TSMC and Samsung foundry manufacturing capacity sold out and outages in a couple of fabs, the febrile atmosphere was beneficial to the likes of SMIC – sales up 21.8 percent quarter-on-quarter – Globalfoundries and United Microelectroncs Corp.
The benefits extended down the top ten foundries with the exception of Tower Semiconductor Ltd. (Migdal Haemek, Israel), which only recorded 4.3 percent growth and, like TSMC and Samsung, lost a small amount of market share.
Global foundry revenue for 2Q21 reached US$24.41 billion, representing a 6.2 percent QoQ increase.
Revenue growth at TSMC and Samsung was hindered by power outages at fabs belonging to each company, although TSMC once again maintained its leadership with revenue of US$13.3 billion and more than 50 percent of the foundry market.
A power outage occurred in TSMC’s Fab14 P7, located in the Southern Taiwan Science Park, in April (see Renesas hit again as TSMC wafer fab suffers power outage) and this caused some wafers at the 40nm and 16nm nodes to be discarded, TrendForce noted.
Samsung suffered a drop of wafer output in 1Q21 due to the winter storm at Samsung’s S2 Fab in Austin, Texas and this also affected wafer input for output in 2Q21 (see Samsung’s snow-days will knock 5% off smartphone production). Samsung was able to produce US$4.33 billion worth of wafers, a 5.5 percent QoQ increase, due to demand for CMOS image sensors, 5G RF transceivers, OLED drivers ICs.
Top ten foundries ranked by global revenue 2Q21. Source: TrendForce.
UMC operated at a capacity utilization rate surpassing 100 percent, and well behind client demand, according to TrendForce. It raised prices and brought online recently installed manufacturing capacity at 28nm and 22nm.
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SMIC achieved 2Q21 revenues of US$1.34 billion, a sequential increase of 21.8 percent, and raised its market share to 5.3 percent. This was driven by strong demand across the board; for 0.18/0.15-micron PMICs; 55/40nm MCU, RF, power and CMOS image sensors, and a continued increase in its average selling prices. Strong adoption of its 14nm FinFET manufacturing process means that part of its production is operating at a fully loaded capacity of 15,000 wafer starts per month, TrendForce reported.
The shortage of foundry manufacturing capacity began in 2H19 and continues. Although additional production is gradually coming online it cannot keep pace with the demand and almost all foundries are operating flat out at present. Foundries are therefore raising prices and adjusting product mixes to maximize profits.
TrendForce says the supply shortage has continued in to the third quarter and together with raised ASPs this will drive sequential growth that is greater than the 6.2 percent since in 2Q21.
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