iSuppli expects only three major semiconductor foundries will survive

Posted on Tuesday, Oct 06 2009 @ 17:51 CEST by Thomas De Maesschalck
Research firm iSuppli predicts the recent downturn is likely to thin the ranks of the top-tier pure-play semiconductor foundries to just three major players in the future. More details over here.
Global pure-play foundry revenue is set to rise to $21.6 billion in 2010, up an impressive 21 percent from $17.8 billion in 2009. This follows a disastrous 10.9 percent plunge in 2009. The foundry market in 2010 will outperform the overall semiconductor industry, which will expand by 13.8 percent.

“The year 2009 is likely to be one that pure-play foundries would love to forget and will make them long for 2010,” said Len Jelinek, director and chief analyst for semiconductor manufacturing at iSuppli. “However, next year is likely to bring a new set of challenges, as the rising cost of competition winnows down the number of players in the market.

The expense of developing and implementing next-generation processes for a variety of technologies is rising rapidly. The only way to be a leader and outperform the market is to stay at the cutting edge of semiconductor process development. Only companies with sufficient size can support these costs.”

In the past, some foundries have found success by focusing on low-cost manufacturing, trailing behind the process migrations of the most advanced players, Jelinek noted. However, this so-called “fast-follower” strategy no longer is a route to success amid slowing market success. In fact, the fast-follower strategy now serves only as a route to the fringes of the semiconductor manufacturing business.


About the Author

Thomas De Maesschalck

Thomas has been messing with computer since early childhood and firmly believes the Internet is the best thing since sliced bread. Enjoys playing with new tech, is fascinated by science, and passionate about financial markets. When not behind a computer, he can be found with running shoes on or lifting heavy weights in the weight room.



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