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The semiconductor foundry market is estimated to grow at a CAGR of 7.74% between 2022 and 2027. The size of the market is forecast to increase by USD 42,781.83 million. The growth of the market depends on several factors, including increasing demand for IoT, growing demand for 14-nm/16-nm FinFET technology, and the evolution of 3D printing.
Vendors are implementing various strategies, such as strategic alliances, partnerships, mergers and acquisitions, geographical expansion, and product/service launches, to enhance their presence in the market. GCS Holdings Inc. - The company focuses on premier compound (III-V) semiconductor (GaAs, InP, and GaN ) wafers and also offers semiconductor devices. The key offerings of the company include semiconductor foundries.
This report extensively covers market segmentation by type (pure-play foundries and IDMs), application (communications, PCs/desktop, consumers, automotive, and others), and geography (North America, APAC, Europe, South America, and Middle East and Africa). It also includes an in-depth analysis of drivers, trends, and challenges. Furthermore, the report includes historic market data from 2017 to 2021.
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The evolution of 3D printing is notably driving the market growth, although factors such as high fluctuations in semiconductor demand may impede the market growth. Our researchers analyzed the data with 2022 as the base year, along with the key drivers, trends, and challenges. A holistic analysis of drivers will help companies refine their marketing strategies to gain a competitive advantage.
The evolution of 3D printing is notably driving market growth. 3D printing is a technology wherein an object is manufactured from its three-dimensional /image by stacking many layers of material. 3D printing has potential applications in many industries, such as medical, aerospace, and automotive. Printed circuit boards (PCB) can be manufactured by using a 3D printer. Using 3D printers for manufacturing PCBs could easily revolutionize the foundry market. Taiwan Semiconductor Manufacturing Co. Ltd. and Intel are trying to use 3D printing to manufacture semiconductors. Although 3D printing cannot entirely replace present manufacturing techniques, it can be used for the production of some specific components.
The tools that are used in 200-mm manufacturing are old and often require new parts to keep them working. Manufacturers are looking at 3D printing to help keep these tools running longer rather than replace the entire tool, which usually is a high cost for the company. 3D printing is an ideal option for foundries producing components that require high-value and low-volume production. Thus, such factors are expected to drive the global market during the forecast period.
The growth of advanced analytics in semiconductor foundries is an emerging trend in the market. Firms are increasingly focusing on interpreting large volumes of data to make important managerial decisions. Big data is a term that indicates large volumes of data. The market is increasingly focusing on the potential benefits of big data that can aid them.
Foundries consist of several tools that contain sensors and other data-collecting devices. This connectivity of devices in fabs provides data from tools, and problems can be solved easily. Predictive maintenance, advanced process controls, and intelligent scheduling are changing the way in which these foundries operate. The manufacturing process by using advanced analytics gets simplified because fabs can make much more informed decisions, which replaces guesswork. Along with error reduction, cost reduction, and streamlining processes, advanced analytics can help fabs to identify new business models and techniques that can be of additional value to the firm. Thus, such factors will drive the global market during the forecast period.
The high fluctuations in semiconductor demand are major challenges impeding the market growth. The current and anticipated demand for the semiconductor industry and products that use semiconductors is highly volatile. Products that use semiconductors include mobile devices, computers, consumer electronics, automotive goods, and telecommunication equipment. Fluctuating demand for these goods will impact the overall semiconductor market, which, in turn, affects the global market.
The semiconductor industry is a highly volatile market, with huge margins of increase, which is followed by industry retrenchments. This cyclicity of the semiconductor industry leads to the industry being highly volatile. Some examples of downturns that affect the market drastically are excess production capacity, obsolete products, and rapid price erosion of ICs. Fierce competition in the semiconductor industry almost reduces a new chip's price by 50% in a couple of months' time. These high fluctuations can often lead to excess inventory levels in times of low demand and low inventory levels in times of high demand. Hence, these factors will likely hinder the global market growth during the forecast period.
The report also includes detailed analyses of the competitive landscape of the market and information about 15 market vendors, including:
Qualitative and quantitative analysis of vendors has been conducted to help clients understand the wider business environment as well as the strengths and weaknesses of key market players. Data is qualitatively analyzed to categorize vendors as pure play, category-focused, industry-focused, and diversified; it is quantitatively analyzed to categorize vendors as dominant, leading, strong, tentative, and weak.
The market share growth by the pure-play boundaries segment will be significant during the forecast period. The reasons for the growth of this segment are high economies of scale that allow pure-play foundries to focus on new process technologies, an increase in the number of fabs being constructed globally, an increase in spending by the pure-play foundries, and a low level of competition that pure-play foundries face from new entrants.
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Pure-play foundries were valued at USD 68,933.92 million in 2017 and continued to grow until 2021. One of the main reasons for the growth is the high economies of scale. These firms have the finances to adopt the latest and best technology, which helps them in addressing market demand. With the increasing adoption of smart devices, such as wearables, smart clothing, and smart textiles, the need for ICs that are embedded in these devices is bound to increase. Emerging technologies, such as AI, IoT, and robotics, will increase the demand for technologically advanced ICs incorporated into these devices. This will result in a high revenue generation for foundries with a high geographical presence and production capacity. It is difficult for new vendors to enter the pure-play foundry market, owing to the high capital requirement of the industry and intense competition. Hence, existing firms control and dominate the market. Their interest in the latest technologies is a major driver for market growth. The market has been witnessing a huge demand for ICs since 2019, owing to the deployment of 5G technology in mass consumer electronic devices. To meet this increased demand, pure-play foundries started focusing on building new fabs that help in meeting the production of ICs. Hence, there will be an increase in the sales of these ICs, which, in turn, is expected to lead to an increase in the revenue of the pure-play foundries.
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North America is estimated to contribute 40% to the growth of the global market during the forecast period. Technavio’s analysts have elaborately explained the regional trends and drivers that shape the market during the forecast period.
The major reason for this dominance of North America in the global market is the highest sales generated from this region. It has a major concentration of the leading semiconductor fabless companies. Moreover, the majority of the customers in the global market are from North America. Hence, the revenue contribution by the region is significantly high and is likely to remain the same during the forecast period, with the US being the prime contributor. Government initiatives in the country are expected to be a major factor in the growth of the market in the US during the forecast period. For instance, the Government of the US is focusing on bringing back the firms into the US to create more jobs, and this will positively impact the foundry market as well.
North America is also turning out to be a critical region for the growth of advanced semiconductor foundries. These advanced semiconductors will have a higher average selling price, which, in turn, will lead to higher revenues. Furthermore, North America is one of the largest markets for newly installed equipment and will be operational in the future. This will impact market growth. Google and Tesla have shown an increasing interest in driverless cars, IT, wearables, and smart devices. Tesla has developed technologies, such as the Tesla Autopilot system, that are set to transform the automobile industry, mainly electric cars. All these products require semiconductor ICs, thereby requiring semiconductor foundries to invest in technologies to build ICs based on new process nodes. Such factors impact the growth of the regional market during the forecast period.
The growth of the regional market was negatively affected in 2020 due to the outbreak of COVID-19. However, in 2021, owing to the large-scale vaccination drives and the reopening of various businesses due to the easing of lockdowns, the regional market regained momentum. Moreover, new product launches and expansion strategies by major semiconductor companies in the region are anticipated to boost the growth of the market in North America during the forecast period.
The report includes the adoption lifecycle of the market, covering from the innovator’s stage to the laggard’s stage. It focuses on adoption rates in different regions based on penetration. Furthermore, the report also includes key purchase criteria and drivers of price sensitivity to help companies evaluate and develop their growth strategies.
Global Semiconductor Foundry Market Customer Landscape
The report forecasts market growth by revenue at global, regional & country levels and analyzes the latest trends and growth opportunities from 2017 to 2027.
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Semiconductor Foundry Market Scope |
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Report Coverage |
Details |
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Page number |
176 |
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Base year |
2022 |
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Historic period |
2017-2021 |
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Forecast period |
2023-2027 |
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Growth momentum & CAGR |
Accelerate at a CAGR of 7.74% |
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Market growth 2023-2027 |
USD 42,781.83 million |
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Market structure |
Fragmented |
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YoY growth 2022-2023(%) |
6.78 |
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Regional analysis |
North America, APAC, Europe, South America, and Middle East and Africa |
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Performing market contribution |
North America at 40% |
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Key countries |
US, Canada, Taiwan, China, and Germany |
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Competitive landscape |
Leading Vendors, Market Positioning of Vendors, Competitive Strategies, and Industry Risks |
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Key companies profiled |
DB HiTek, Fujitsu Ltd., GCS Holdings Inc., GlobalFoundaries US Inc., Hua Hong Semiconductor Ltd., MACOM Technology Solutions Holdings Inc., NXP Semiconductors NV, ON Semiconductor Corp., Powerchip Semiconductor Manufacturing Corp., Robert Bosch GmbH, ROHM Co. Ltd., Samsung Electronics Co. Ltd., Semiconductor Manufacturing International Corp., Taiwan Semiconductor Manufacturing Co. Ltd., Toshiba Corp., United Microelectronics Corp., Vanguard International Semiconductor Corp., WIN Semiconductors Corp., X FAB Silicon Foundries SE, and Analog Devices Inc. |
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Market dynamics |
Parent market analysis, Market growth inducers and obstacles, Fast-growing and slow-growing segment analysis, COVID-19 impact and recovery analysis and future consumer dynamics, and Market condition analysis for the forecast period. |
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Customization purview |
If our report has not included the data you are looking for, you can reach out to our analysts and get customized segments. |
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1 Executive Summary
2 Market Landscape
3 Market Sizing
4 Historic Market Size
5 Five Forces Analysis
6 Market Segmentation by Type
7 Market Segmentation by Application
8 Customer Landscape
9 Geographic Landscape
10 Drivers, Challenges, and Trends
11 Vendor Landscape
12 Vendor Analysis
13 Appendix
Research Framework
Technavio presents a detailed picture of the market by way of study, synthesis, and summation of data from multiple sources. The analysts have presented the various facets of the market with a particular focus on identifying the key industry influencers. The data thus presented is comprehensive, reliable, and the result of extensive research, both primary and secondary.
INFORMATION SOURCES
Primary sources
Secondary sources
DATA ANALYSIS
Data Synthesis
Data Validation
REPORT WRITING
Qualitative
Quantitative
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