The market is set to be worth US$84.6 billion in 2020, up 23.7 percent on 2019, with TSMC taking 54 percent, followed by Samsung with 17 percent and Globalfoundries with 7 percent.
In 1H20 market was influenced by demand for high performance computing chips in support of work-from-home and distance education initiatives prompted by the Covid-19 pandemic. In 2H20 US trade sanctions brought forward Huawei's component ordering and demand was increased for 5G infrastructure build-out and 5G smartphones.
In 2021 TrendForce expects that pandemic-induced demand will persist, the US-China trade war will remain unresolved, and the global economy will recover after the downturn of 2020. As a result, TrendForce expects the foundry industry to rise by 6 percent year-on-year in 2021.
Global foundry revenue 2017 to 2021 (US$millions). Source: TrendForce.
TSMC's manufacturing capacity for its 5nm node is running at about 90 percent. The demand from Apple is unable to fully make up for the absence of HiSilicon orders due to the US sanctions on Huawei.
TSMC's 7nm and Samsung's 7/5nm nodes are seeing high demand from AMD/MediaTek and Nvidia/Qualcomm, respectively. The nodes are fully loaded and this is expected to persist at least until 2Q21. While there may be some easing of the situation in 2H20 TrendForce said advanced processes will once again be in severe shortage in 2022 given the growth of the HPC market and increased orders from Intel, which is accelerating the outsourcing of its production (see Intel goes foundry for 7nm due to yield issues).
Certain components made on 200mm wafers such as mixed-signal power management ICs (PMICs) and and display driver ICs (DDICs) is also in high demand and short supply leading to a gradual transfer to 300mm wafers. However, the shortness of supply of 200mm wafer manufacturing capacity is likely to persist.
Foundry market share 2020 to 2021. Source: TrendForce.
The addition of Chinese foundry SMIC to the so-called 'entity list' in September 2020 (see US hits SMIC with embargo, as expected) has compelled Broadcom and Qualcomm to re-assign orders outside China. GigaDevice, a Chinese fabless microcontroller vendor, has re-assigned manufacturing from SMIC to HHGrace.
TrendForce reckons that If US sanctions are still in place in 2H21 SMIC may well be unable to function, even domestically, due to lack of specialty materials and parts for servicing equipment, and this could create an even tighter foundry supply market.
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