Semiconductor foundry companies

August 21, 2012 — A ranking of the forecasted top 2012 semiconductor foundries (pure-play and IDM) was released by IC Insights. TSMC is expected to remain the leading foundry, with sales almost 4x that of second-ranked GLOBALFOUNDRIES, which in turn is expected to have more than 2x the sales of the fifth-ranked foundry SMIC. Samsung is expected to be the largest of only three IDM foundries in the 2012 ranking with almost 8x the sales of IBM, its closest IDM foundry competitor.

Table. Top 12 IC foundries of 2012. SOURCE: IC Insights, company reports.

In total, the top 12 foundries in the table are expected to represent 89% of the total foundry sales (IDM and pure-play) in 2012. This share is eight points higher than the 81% figure the top 12 represented in 2009 (before Samsung dramatically ramped up production for Apple). With the barriers to entry (e.g., fab costs, access to leading edge technology, etc.) into the foundry business being so high and rising, IC Insights expects this “top 12” marketshare figure to steadily rise in the future.

For the second year in a row, Samsung is expected to be ranked as the fourth largest IC foundry. However, IC Insights believes that the company will challenge UMC for the number three spot in the ranking in 2013. Samsung has the ability (i.e., leading-edge capacity and a huge capital spending budget) and desire to become a major force in the IC foundry business. It is estimated that the company’s capacity dedicated to its IC foundry business reached 130K 300mm wafers per month in mid-2012. Using an average revenue per wafer figure of $2, 500, Samsung currently has the potential to produce annual IC foundry sales of about $3.9 billion.

In 2Q12, Samsung was by far the largest supplier of smartphones in the world, shipping an estimated 54 million handsets with Apple coming in second after selling about 26 million iPhones. Thus, in total, Samsung and Apple represented almost half of the total worldwide smartphone shipments (168 million) in 2Q12. As a result, Samsung is enjoying a tremendous amount of synergy by supplying application processors to the largest (i.e., itself) and second-largest (i.e., Apple) suppliers in the world of one of the hottest electronic system products in the world — smartphones.