Enormous gap in technology between leading foundries and the rest, says IC Insights
The process technology gap between the top foundries and the others is ‘enormous’, says IC Insights.
Only four companies out of 18 pure-play foundries can make leading edge ICs and only four others have a 90nm capability.
‘In 2012, TSMC and Globalfoundries were in high-volume production of devices using 28nm feature sizes,’ says IC Insights, ‘the process technology gap between the other significant pure-play IC foundries and the leading-edge producers is enormous.’
Leaving aside the Big Four – TSMC, Globalfoundries, UMC and SMIC – there are only four other foundries – TowerJazz, Grace/HHNEC, Dongbu, and Xinxin – expected to be able to produce ICs using ?90nm feature sizes in 2012, and this production is likely to be relatively limited, says IC Insights.
Collectively, these 14 ‘non-major’ IC foundries are forecast to account for $4.6bn in sales, or about 15% of the total pure-play IC foundry market in 2012.
Before Globalfoundries entered the IC foundry market, TSMC was by far the technology leader among the major pure-play IC foundries.
In 2012, about 37% of TSMC’s revenue is expected to come from ?45nm processing.
Although Globalfoundries is expected to have a greater percentage of its sales dedicated to ?45nm technology than TSMC this year, TSMC is forecast to have more than twice the sales volume at ?45nm as compared to GlobalFoundries in 2012 ($6.23bn for TSMC and $2.79bn for GlobalFoundries).
In contrast, China-based SMIC only entered initial production of 45nm technology in early 2012, more than three years after TSMC first put its 45nm process into production.
In fact, less than 1% of SMIC’s 2012 sales are expected to come from devices having ?45nm feature sizes, which is why its revenue per wafer ($759) is expected to be so low this year as compared to TSMC ($1,190) and GlobalFoundries ($1,157).
In 2012, the ?45nm foundry segment is expected to represent 30% of the total pure-play IC foundry revenue, up from 22% in 2011. Older technologies (i.e., >0.18µ segments) are forecast to account for only 13% of the pure-play foundry market in 2012, down one point from 2011 and two points from 2010.
Only 11% of UMC’s sales are forecast to be dedicated to ?45nm technology this year (UMC is offering a 40nm process after bypassing 45nm technology). In contrast, GlobalFoundries is expected to have almost two-thirds of its sales in 2012 come from ?45nm technology. Moreover, TSMC is forecast to have about $1.8bn in sales of 28nm devices alone this year, up almost 10x from the $185m worth of 28nm product the company sold in 2011.
IC Insights continues to believe that the more profitable (i.e., successful) foundries will be those that keep at the leading edge of the process technology roadmap (e.g., GlobalFoundries’ recent announcement that it plans to begin foundry production using 14nm FinFET IC technology in 2014).
This can be accomplished through joint ventures and licensing agreements such as the partnership between IBM and GlobalFoundries and/or through significantly increasing R&D spending to develop advanced technology, as TSMC has done.