TSMC expected to take 58% share of contract chip making market

Taiwan Semiconductor Manufacturing Co. (TSMC,???), the world's largest contract chip maker, is expected to take a 58 percent share of the global pure-play wafer foundry operating market in 2016, and retain the world's No. 1 title, according to market information advisory firm IC Insights.

In a research note, IC Insights said that TSMC is expected to post US$28.57 billion in sales for 2016, up 8 percent from a year earlier. Despite the sales growth, TSMC's market share for 2016 is likely to fall one percentage point from a year earlier, IC Insights added.

GlobalFoundries Inc. of the United States is expected to come in second by generating US$5.65 billion in sales in 2016, up 12 percent from a year earlier, to take an 11 percent share in the world market, lagging far behind TSMC, according to IC Insights.

United Microelectronics Corp. (UMC, ??), another contract chip maker from Taiwan, is expected to grab a 9 percent stake in the world pure-play wafer foundry market in 2016 to take the third spot in the rankings by posting US$4.49 billion in revenue, up 1 percent from a year earlier, IC Insights added.

China's Semiconductor Manufacturing International Corp. (SMIC,??) is expected to take the fourth largest contract chip maker title in 2016 by taking a 6 percent market share as the manufacturer is likely to generate US$2.85 billion in sales, a 27 percent increase from a year earlier, the research report showed.

SMIC and other contract chip makers in China are expected to grab about 8.2 percent of the global pure-play wafer foundry market in 2016, IC Insights said.

IC Insights said that since the Chinese government has been gearing up to develop its own semiconductor industry, Chinese contract chip makers are expected to witness their combined market share continuing to grow through 2020.

According to the research paper, TowerJazz of Israel is expected to take a 3 percent share in the world's contract chip production market in 2016 by generating US$1.25 billion in sales, up 30 percent from a year earlier.

The growth rate enjoyed by TowerJazz in 2016 is expected to be the highest among the top 10 contract chip makers in the world, IC Insights said. During the 2013-2016 period, TowerJazz's compound annual growth rate in sales is expected to hit 35 percent, IC Insights added.

Due to the significant growth, PowerJazz is expected to replace Taiwan's Powerchip Technology Corp. (??) to rank among the top five contract chip makers in the world, up one notch from a year earlier.

For its part, Powerchip is expected to post US$1.24 billion in sales, down 2 percent from a year earlier, to hold the sixth position in the global rankings, IC Insights said.

Taiwan-based Vanguard International Semiconductor Corp. (????) is expected to come in seventh by posting US$780 million in sales in 2016, ahead of Hua Hong Semiconductor Ltd. (??), Dongbu HiTek Co. of South Korea, and Systems on Silicon Manufacturing Co. of Singapore, IC Insights said.

The advisory firm said that sales to be generated by the global pure-play wafer foundry industry for 2016 are expected to rise 9 percent from a year earlier to US$49.12 billion, while revenue to be posted by the worldwide semiconductor industry is expected to fall about 2 percent year-on-year.

Source: Focus Taiwan