However, market uncertainty looms as TSMC’s shipments to HiSilicon ceased in mid-September.
China was responsible for essentially all of the total pure-play foundry market increase in 2018. In 2019, the U.S./China trade war slowed China’s economic growth but its foundry marketshare still increased by two percentage points to 21 percent. Despite the Covid-19 shutdown of China’s economy earlier this year, China’s share of the pure-play foundry market is forecast to be 22 percent in 2020, 17 percentage points greater than it registered in 2010.
Japan is expected to remain the smallest market for pure-play foundry sales with only a 5 percent share this year, up just two points from 2010. With its foundry market forecast to be worth about $3.6 billion in 2020, Japan’s share of pure-play foundry sales is expected to be just one tenth of the Americas at $35.1bn.
Bill McClean at IC Insights believes that the Japanese market for pure-play foundry services will increase only slightly in the future. The fabless IC company infrastructure in Japan is small and not expected to grow much over the next five years, so almost all of the growth in foundry demand in Japan is expected to come from a greater number of Japanese IDMs such as Renesas, Toshiba and Sony using foundry services.
The growth of HiSilicon and other fabless IC companies in China has elevated the demand for local foundry services.
In total, pure-play foundry sales in China increased by 10 percent in 2019 to $11.8 billion, much better than the 1 percent decline in the total pure-play foundry market last year. In 2020, pure-play foundry sales to China are forecast to jump by 26 percent, seven points better than the 19% increase expected to be registered by the total pure-play foundry market this year.
UMC showed the highest sales increase into China last year with a 19 percent jump. This increase was driven by the continued ramp up of its Fab 12X