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The semiconductor foundry market is the heart of the global electronics business. It's necessary to make integrated circuits (ICs), which run a huge range of products. There are many things that affect supply, demand, and technology progress in the semiconductor foundry business. Making integrated circuits (ICs) for computers, cellphones, car systems, and other uses is a very complicated process that is at the heart of the semiconductor factory industry.
The fast development of technology is one of the main things driving growth. Because of the constant need for computers that are smaller, faster, and use less energy, semiconductor foundries are always growing. Moore's Law, which says that the number of transistors will double about every two years, has been a big deal in the business world. This never-ending search for performance gains and reductions keeps foundries on their toes and feeds a never-ending circle of R&D.
The state of the world economy also has a big effect on how markets work. Modern factories and tools need big expenses, so chip foundries are businesses that need a lot of money to run. When the economy is bad, people may not buy as much, which in turn lowers the desire for gadgets. The semiconductor business goes through cycles, which can cause manufacturer income to change. This can affect both long-time competitors and newcomers.
Foundries often work with original equipment makers (OEMs) and design companies to make creative ideas come to life. Through these partnerships, foundries can shorten the time it takes to get a product to market, make the production process easier, and use the knowledge of their partners. It's important to build trusted connections in the electronics business because it's so linked.
Geopolitical issues can have a big impact on the market for chip foundries. Supply chain problems, trade disputes, and the concentration of chip manufacturing in some areas can all have an effect on the costs and availability of important parts. Changes in trade laws, intellectual property rights, and international situations can all cause unpredictability. As a result, foundries have to change to new situations and look into different ways to lower their risks.
Covered Aspects:
| Report Attribute/Metric | Details |
|---|---|
| Segment Outlook | Technology, Industry, Foundry, and Region |
Semiconductor Foundry Market Highlights:
Global Semiconductor Foundry Market Overview:
Semiconductor Foundry Market Size was valued at USD 60338.16 Million in 2023. The Semiconductor Foundry industry is projected to grow from USD 64688.54 Million in 2024 to USD 103292.33 Million by 2032, exhibiting a compound annual growth rate (CAGR) of 7.20% during the forecast period (2024 - 2032). Rising demand for 5G wireless and Internet of Things solutions and government funding for the advancement of semiconductor technology are the key market drivers enhancing the market growth.
Source: Secondary Research, Primary Research, MRFR Database and Analyst Review
Semiconductor Foundry Market Trends
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Rising demand for 5G wireless and Internet of Things solutions
A significant growth focus for semiconductors in the forthcoming years will be internet-connected devices that utilize sensors and software to gather and analyze data. For instance, smart factories may help you keep an eye on the activities on the shop floor and ensure that every machine is running as efficiently as possible, freeing up space on the floor and assisting companies in reducing spending. A smartphone app can be used to manage the lights and appliances in a user's house due to the emergence of smart homes. Users of IoT devices would be able to remotely check on security aspects of their homes, such if windows are unlocked or leaking smoke.
Mobile telecommunications networks nowadays operate at significantly higher speeds, reliability, and latency due to the switch to 4G and the upgrading to 5G. For all Internet-connected devices to receive the data they require from 5G, high-speed connections are required. For a future market, 5G phones have been developed by manufacturers of mobile phones. The market for semiconductor foundries is predicted to expand as a result of the increased demand for semiconductors brought on by these new, smart phones. According to Statista, the semiconductor industry market is valued 422.34 billion and in 2022 the number reached USD 618 billion. As a result, the rising semiconductor market is anticipated to create the lucrative opportunity for the market during forecast period.
However, the semiconductor foundry market is growing quickly. The semiconductor foundry industry is being driven by this factor as semiconductor foundries step up their efforts to produce automotive chips in expectation of an increase in semiconductors used in autonomous driving. Semiconductor foundry services will be advantageous to numerous sectors. Some of the major industries that require semiconductor foundry services are telecom, computer and networking, consumer electronics, and automotive.
The demand for effective semiconductor foundry services is rising in response to the growing popularity of mobile, network-capable gadgets with internet access and multimedia capabilities. IoT systems analyse data to help users connect various items to the internet and make decisions. They therefore operate in a range of industries, such as electronics, retail, and the medical and automotive sectors. The Semiconductor Foundry Market is also being driven by government support from a number of countries for the improvement of semiconductor technology. For instance, in 2021, the President Moon Jae-in of South Korea launched a new national semiconductor industrial policy aiming at ensuring the country's leadership in the chip industry by 2030 according to the data of Semiconductor Industry Association, which is driving the growth for the market over the forecasted period. The plan includes up to 50% tax credits for R&D and 16% for manufacturing, as well as USD 886 million in long-term financing, USD 1.3 billion in government R&D investments, streamlined regulations, and improved infrastructure. According to SIA, the proposed tax advantages for Korean chip companies might total USD 55-USD 65 billion over the next three years.
Semiconductor Foundry Market Segment Insights:
Semiconductor Foundry Industry Insights
The semiconductor foundry market segmentation, based on Industry, includes Automotive, Aerospace, Industrial, Consumer Electronics Healthcare, and Pure IDMS. The Automotive semiconductor foundry segment held the majority share in the semiconductor foundry market revenue. This is primarily owing to the rising demand for safer personal transportation and growth in electric and autonomous vehicles that driving the need for semiconductors. In automotive vehicles electronic auto equipment including electronic control units, infotainment systems, and sensors are mostly made of semiconductors.
Feb 2022: New automotive microcontrollers (MCUs) for centralised (zonal and domain) electrical architectures and electric vehicles were launched by STMicroelectronics. High-speed control-loop processing is integrated into the new Stellar E MCUs from STMicroelectronics, which are made for software-defined electric vehicles of the next generation. This platform makes it possible for a brand-new value chain for EVs with the new Stellar E devices.
Semiconductor Foundry Insights
The semiconductor foundry market segmentation, based on Foundry, includes Pure Play Foundry, IDMs. The Pure Play Foundry segment dominated the market in 2021 and is projected to be the faster-growing segment during the forecast period, 2022-2030. This is due to the increasing consumer electronics that anticipated to support the market growth during forecast period.
Figure 2: Semiconductor Foundry Market, by Foundry, 2021 & 2030 (USD Billion)
Source: Secondary Research, Primary Research, MRFR Database and Analyst Review
Semiconductor Foundry Regional Insights
By Region, the study provides the market insights into North America, Europe, Asia-Pacific and Rest of the World. North America Semiconductor Foundry market accounted for USD 24.04 billion in 2021 and is expected to exhibit a significant CAGR growth during the study period. This is attributed to the growing rising consumer electronics industry, rising demand for connected devices, rising adoption of Internet of Things, and growing demand in electronic vehicles and autonomous vehicles.
Further, the major countries studied in the market report are: The U.S, Canada, Germany, France, UK, Italy, Spain, China, Japan, India, Australia, South Korea, and Brazil.
Figure 3: SEMICONDUCTOR FOUNDRY MARKET SHARE BY REGION 2021 (%)
Source: Secondary Research, Primary Research, MRFR Database and Analyst Review
Europe semiconductor foundry market accounts for the second-largest market share due to the availability of advanced technology, rising automotive industry, growing government investment in smart city project and connected cars infrastructure development, and growing consumer electronic industry in the region. Further, the Germany semiconductor foundry market held the largest market share, and the UK semiconductor foundry market was the fastest growing market in the European region
The Asia-Pacific Semiconductor Foundry Market is expected to grow at the fastest CAGR from 2024 to 2032. This is due to rising adoption of IOT devices, growing demand in electronics vehicles, and rising government investment in smart city projects that anticipated to support the market growth in the region. Moreover, China semiconductor foundry market held the largest market share, and the India semiconductor foundry market was the fastest growing market in the Asia-Pacific region
Semiconductor Foundry Key Market Players & Competitive Insights
Major market players are spending a lot of money on R&D to increase their product lines, which will help the semiconductor foundry market grow even more. Market participants are also taking a range of strategic initiatives to grow their worldwide footprint, with key market developments such as new product launches, contractual agreements, mergers and acquisitions, increased investments, and collaboration with other organizations. Competitors in the semiconductor foundry industry must offer cost-effective products to expand and survive in an increasingly competitive and rising market environment.
One of the primary business strategies adopted by manufacturers in the semiconductor foundry industry to benefit clients and expand the market sector is to manufacture locally to reduce operating costs. In recent years, semiconductor foundry industry has provided semiconductor with some of the most significant benefits. The semiconductor foundry market major player such as Taiwan Semiconductor Manufacturing Company (TSMC) Limited (Taiwan), Vanguard International Semiconductor Corporation (Taiwan), and others are working to expand the market demand by investing in research and development activities.
In March 2022, DENSO Corporation announced that it would invest USD 0.35 billion in Japan Advanced Semiconductor Manufacturing, Inc., TSMC's majority-owned manufacturing division in Kumamoto Prefecture, Japan, according to a statement from Sony Semiconductor Solutions Corporation and DENSO Corporation. DENSO will own more than 10% of the ownership in JASM after this investment.
In January 2022, The Fab L3B building and its facilities were acquired by VIS. The company expects to reach an approximate monthly manufacturing capacity of 40,000 8-inch wafers due to these acquisitions, which have allowed it to boost its production capacities. This makes it possible for the company to meet the steadily rising short- and long-term demand for semiconductors.
Key Companies in the semiconductor foundry market includes
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Taiwan Semiconductor Manufacturing Company (TSMC) Limited (Taiwan)
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Foundries (US)
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United Microelectronics Corporation (UMC) (Taiwan)
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Semiconductor Manufacturing International Corporation (SMIC) (China)
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Samsung Group (South Korea)
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Samsung Group (South Korea)
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Fujitsu Semiconductor Limited (Japan)
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Fujitsu Semiconductor Limited (Japan)
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STMicroelectronics NV (Switzerland)
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TowerJazz (Tower Semiconductor Limited) (Israel)
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Vanguard International Semiconductor Corporation (Taiwan)
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X-FAB Silicon Foundries (Germany)
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Magnachip (South Korea)
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United Microelectronics Corporation (Taiwan)
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Powerchip Semiconductor Manufacturing Corp. (Taiwan), among others
Semiconductor Foundry Industry Developments
July 28, 2023: For the opening ceremony of its global research and development centre in Hsinchu, Taiwan, TSMC was the host. It brought together customers, industry and academic R&D partners, partners in the design ecosystem, and senior government officials to celebrate the company's newest hub for bringing next-generation semiconductor technology into reality.
January 2023: Apple announced plans for designing their new Mac Book Air and iMac with their own Apple M3 processor built on a three-nanometer process. In line with these plans, by December of 2022, TSMC launched mass production of its three-nanometer chip process destined for future generations of Macs, iPhones as well as other Apple devices.
Moreover, TSMC stated that beginning in four years' time, it will fabricate three-nanometer chips at the factory in Arizona where it presently supplies Apple; this factory is part of President Biden’s plan for growing domestic chip manufacturing.
November 2022: Hua Hong Semiconductor Ltd received regulatory approval for a $2.5bn IPO on the Shanghai exchange market. This intended IPO reflects the deepening confrontation between China and US chipmakers due to geopolitical tensions. Because of this, with construction starting in 2023 and the building set to produce 83 thousand wafers per month, Hua Hong plans to use the funds raised from the IPO to build a new fabrication plant or fab in Wuxi City on China’s eastern coast.
For example, Intel made an initial declaration toward investing over $20bn for constructing two state-of-the-art chip-making factories in Ohio later in January 2022. Under the IDM 2.0 plan from Intel, this investment will boost production towards meeting the high demand for advanced semiconductors underpinning next cutting-edge innovations from the company.
Semiconductor Foundry Market Segmentation:
Semiconductor Foundry Technology Outlook
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10/7/5 nm
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16/14 nm
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20 nm
Semiconductor Foundry Industry Outlook
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Automotive
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Aerospace
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Industrial
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Consumer Electronics Healthcare
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Pure IDMS
Semiconductor Foundry Foundry Outlook
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Pure Play Foundry
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IDMs
Semiconductor Foundry Regional Outlook
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North America
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US
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Canada
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Europe
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Germany
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France
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UK
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Italy
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Spain
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Rest of Europe
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Asia-Pacific
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China
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Japan
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India
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Australia
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South Korea
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Australia
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Rest of Asia-Pacific
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Rest of the World
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Middle East
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Africa
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Latin America
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