Foundry capacity surpassed memory capacity in 2015 and is expected to continue the lead.
The era of every company building a captive fab for next-generation products is ancient history, as foundries throughout the world provide leading-edge technology and flexible capacity in a timely and cost-effective manner. In today’s mobile-driven ecosystem, faster product development cycles and time-to-market have become the norm for the industry. Now, this trend is even spreading to the complex automotive device world. Automakers are accelerating the electronic components product cycle racing to introduce more innovation quickly, and to bridge the gap between car ‘infotainment systems’ and trendy mobile gadgets. This means that foundry services will be required to keep pace. The product transition and diversity of the Internet of Things (IoT) era will further expand the fab-lite or fabless business model in favor of the foundry model.
According to SEMI’s World Fab Forecast, overall foundry capacity has surpassed memory capacity in 2015 as the largest segment and is expected to continue the lead in the coming years. Foundry capacity growth is forecast to outgrow the overall industry at about 5% each year to reach 6 million wafers per month (wpm) (200mm equivalent) by the end of 2017.
Taiwan is the largest foundry capacity region and accounts for over 55% of 300mm foundry capacity in the world. TSMC and UMC are the two leading companies (in Taiwan) driving the capacity addition. TSMC is gearing up Fab 12 Phase 7 and Fab 15 Phase 5 and 6 for upcoming 10nm and below production. UMC is expanding 28nm capacity and 14nm preparation at Fab 12A P5.
China, on the other hand, is the second largest foundry capacity region and the fastest growing market. China’s overall foundry capacity will grow from 950,000 wpm in 2015 to 1.2 million wpm by the end of 2017, accounting for almost 20% of worldwide foundry capacity. SMIC, the leading foundry player in China, is now expanding capacity at its existing facilities B1 in Beijing and Fab 8 in Shanghai (both 300mm fabs). Meanwhile, SMIC is ramping up their new Beijing B2 fabs (300mm) as well as Fab 15 (200mm) in Shenzhen. SMIC’s expansion has both 28nm/40nm capacity and mature nodes in 200mm in mind. Other players driving expansion include XMC who will continue to build its capacity at Fab A for NOR flash foundry; Huali’s second fab is also on the horizon and expected to start construction next year to bring up capacity in the later half of 2018.
Taiwanese foundries will also contribute to the growth of China’s foundry capacity in the coming years. UMC’s Xiamen Fab 12X will start production later this year, followed by Powerchip’s Hefei fab in 2017 and TSMC’s Nanjing Fab in 2018. These three projects will have at least 110,000 wpm (300mm) combined capacity when fully ramped.
Other than capacity additions, the technology race is particularly intense for leading-edge process nodes. TSMC, Samsung and GLOBALFOUNDRIES are all vying for leadership in the 10nm and below technologies nodes. These advancements will continue to drive foundry investment in the years to come, especially in Taiwan and in China.