Gartner Says Semiconductor Foundry Market Grew 5.1 Percent in 2011 to Reach $29.8 Billion Media Tablet and Mobile Phone Sales Ensure Positive Market Growth STAMFORD, Conn. March 30, 2012 -- The worldwide semiconductor foundry market totaled $29.8 billion in 2011, a 5.1 percent increase from 2010, according to Gartner, Inc. Analysts said the semiconductor supply chain experienced some impact from the Japanese disasters and Thailand flooding. However, without the steep depreciation of U.S. currency, analysts said that foundry growth in 2011 would have been just 0.7 percent. "Thanks to stable media tablet and mobile phone sales, a slide of the semiconductor and foundry revenue in 2011 was prevented," said Samuel Tuan Wang, research director at Gartner. "After 40.5 percent growth from 2009 to 2010, the foundry market maintained relatively flat business in 2011 due to the weakness in PC production and an overall consumer demand hit, as well as a leaner inventory practice by customers that started in mid-2011." Consolidation and domination of business continued. The top five foundry players accounted for almost 80 percent of the foundry market share, with the top player, TSMC, expanding its revenue over 2010 and reaching 48.8 percent share in 2011 (see Table 1). Top 10 Companies' Sales Revenue From Shipments of Foundry Wafers to the World, 2011 (Millions of U.S. Dollars) 2011 2010 COMPANY 2010 2010 2011 2011 YR-OVER-YR RANK RANK SALES MKT SHARE(%) SALES SHARE(%) CHANGE(%) 1 1 TSMC 13,332 47.1 14,533 48.8 9.0 2 2 UMC 3,824 13.5 3,604 12.1 -5.8 3 3 GlobalFoundries 3,520 12.4 3,580 12.0 1.7 4 4 SMIC 1,554 5.5 1,319 4.4 -15.1 5 6 TowerJazz 509 1.8 613 2.1 20.4 6 8 IBM Microelec 500 1.8 545 1.8 9.0 7 7 Vanguard Intl 505 1.8 516 1.7 2.2 8 5 Dongbu HiTek 512 1.8 483 1.6 -5.7 9 10 Samsung* 390 1.4 470 1.6 20.5 10 19 Powerchip Tech 149 0.5 431 1.4 189.3 Top 10 in 2011 24,795 87.6 26,094 87.7 5.2 Others 3,510 12.4 3,660 12.3 4.3 Total Market 28,305 100.0 29,754 100.0 5.1 Table reformatted for publication on Dow Jones Newswires *Samsung revenue does not include ASIC business from Apple Source: Gartner (March 2012) Samsung's foundry, with $470 million in revenue, ranked No. 9. However, Samsung Electronics had been very aggressively expanding its LSI business in 2011. Had the estimated $1 billion Apple wafer business been included in its foundry revenue, Samsung would rank as high as No. 4 in the foundry ranking. Powerchip had a nearly threefold increase in foundry revenue in one year due to the strategic decision to shift from the commodity DRAM business to foundry in early 2011. Communications, consumer and data processing continued to be the three key applications driving the foundry business; they accounted for 42.7 percent, 20.9 percent and 20.3 percent of the foundry revenue, respectively, in 2011. Fabless customers contributed 77.8 percent of the foundry business, integrated device manufacturers contributed 20.2 percent, and the remaining came from system companies. By region, America's customers generated 62.8 percent of the foundry revenue, Asia/Pacific 22.2 percent, Europe 10 percent and Japan 4.9 percent. "Given the aggressive capital spending by large foundries during 2010 and 2011, the oversupply of foundry capacity was inevitable," said Mr. Wang. "The utilization rate for foundries continued to decline quarter to quarter in 2011, causing the annual average utilization rate to drop to 81 percent from 91 percent in 2010. Advanced technology for mobile applications was the driver for the growth of foundry business in 2011, and the demand is expected to remain high during the next few years." Additional details are available in the Gartner report "Market Share: Semiconductor Foundry Market in 2011." The report is available at http://www.gartner.com/resId=1952216. About Gartner Gartner, Inc. (NYSE: IT) is the world's leading information technology research and advisory company. Gartner delivers the technology-related insight necessary for its clients to make the right decisions, every day. From CIOs and senior IT leaders in corporations and government agencies, to business leaders in high-tech and telecom enterprises and professional services firms, to technology investors, Gartner is a valuable partner to 60,000 clients in 11,500 distinct organizations. Through the resources of Gartner Research, Gartner Executive Programs, Gartner Consulting and Gartner Events, Gartner works with every client to research, analyze and interpret the business of IT within the context of their individual role. Founded in 1979, Gartner is headquartered in Stamford, Connecticut, USA, and has 4,500 associates, including 1,250 research analysts and consultants, and clients in 85 countries. For more information, visit www.gartner.com.
