Semiconductor Foundry Market By Technology Outlook (10/7/5 nm, 16/14 nm), Foundry Outlook (Pure Play Foundry, IDMs), Application (Consumer Electronics, Automotive, Industrial), & Region for 2024-2031

Published Date: August - 2024 | Publisher: MIR | No of Pages: 320 | Industry: latest updates trending Report | Format: Report available in PDF / Excel Format

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Semiconductor Foundry Market Valuation – 2024-2031

The Semiconductor Foundry Market is growing rapidly, with analysts expecting significant expansion in the coming years. Modern electronics are in high demand across a wide range of businesses. Consumer electronics, transportation (particularly electric and self-driving vehicles), and telecommunications sectors all require more powerful and sophisticated CPUs. This leads to an ongoing need for increasing foundry production. the market size surpass USD 117.36 Billion valued in 2023 to reach a valuation of around USD 194.23 Billion by 2031.

Emerging technologies, such as artificial intelligence and the Internet of Things (IoT), are adding gasoline to the fire. AI applications rely largely on specialist hardware, but the ever-expanding network of linked objects in the IoT world necessitates a large number of chipsets. Governments are also involved, with greater financing for local semiconductor development and measures to strengthen supply chains. This fosters a favorable climate for foundries to expand their operations and fulfill increasing demand. The rising demand for cost-effective and efficient semiconductor foundry is enabling the market grow at a CAGR of 6.50% from 2024 to 2031.

Semiconductor Foundry MarketDefinition/ Overview

A semiconductor foundry is a specialized manufacturing facility that manufactures semiconductor devices, such as integrated circuits, for other companies that design similar products but do not have their fabrication operations. Foundries provide the infrastructure, technology, and knowledge required to manufacture chips with a variety of techniques, materials, and designs. They play an important role in the semiconductor supply chain by allowing design firms to focus on innovation while foundries handle the actual manufacture of their concepts.

Semiconductor foundries are critical for a variety of applications, including consumer electronics, automotive systems, telecommunications, and industrial automation, because they manufacture chips used in smartphones, laptops, and IoT devices. As technology improves, the future of semiconductor foundries appears to be bright, driven by rising demand for high-performance computers, artificial intelligence, and 5G technologies. With the emergence of new applications such as autonomous vehicles and edge computing, foundries are expected to invest in advanced manufacturing techniques such as smaller node processes and heterogeneous integration to meet the increasing complexity and performance demands of next-generation semiconductor devices.

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How Does the Increasing Demand for Advanced Electronic Devices Drive the Growth of the Semiconductor Foundry Market?

The growing need for improved electronic devices will boost the semiconductor foundry business. The growth of smartphones, tablets, and other smart electronics increases the demand for high-performance and energy-efficient semiconductors. The International Data Corporation (IDC) predicted that global smartphone shipments will reach 1.38 billion units by 2021, highlighting the high need for semiconductors in these devices. This spike in demand forces semiconductor foundries to improve their manufacturing capacities and adopt cutting-edge technologies, driving market growth.

The increasing deployment of Internet of Things (IoT) devices will drive the Semiconductor Foundry Market. As the IoT ecosystem grows, with the International Data Corporation (IDC) forecasting 41.6 billion connected IoT devices by 2025 and the collection of 79.4 zettabytes of data, demand for semiconductors in various IoT applications will increase. This rise opens up significant prospects for semiconductor foundries to supply the growing demand for sophisticated and specialized chips, ultimately driving market expansion.

How Does the High Initial Investment Impact the Growth of the Semiconductor Foundry Market?

Okay, so the Semiconductor Foundry Market, right? One of the big things you'll notice is that getting started costs a TON of money, and that definitely affects how fast the market can grow. Think about itsetting up a foundry and keeping it running takes huge investments in all the latest tech, shiny new equipment, and building out the whole infrastructure. These huge upfront costs can really stop new companies from even trying to get in the game, and even hold back the companies that are already there from expanding as much as they might want to. Now, all that being said, this heavy initial investment, while limiting growth in the short term, could also push companies to be more innovative and efficient in the long run. After all, they'll want to get the most bang for their buck, driving them to come up with new technologies and scale up to save money.

Technological complexity will have an impact on the growth of the Semiconductor Foundry Market. Advanced semiconductor device development and manufacturing necessitate cutting-edge technologies, complex equipment, and highly specialized knowledge. As semiconductor designs get more sophisticated, foundries must continue to invest in R&D to stay up with technological advances. While this can drive innovation and result in more efficient and powerful chips, it also raises entry barriers and increases operational expenses. As a result of these hurdles, the market may suffer slower growth; yet, foundries that successfully travel the intricacies might gain major competitive advantages and market leadership.

Category-Wise Acumens

Will Power Efficiency and Cost-effectiveness Offered by 16/14 Nm Favor the Semiconductor Foundry Market?

Power efficiency and affordability will push the adoption of 16/14 nm techniques in the Semiconductor Foundry Market. Currently, the 16/14 nm sector dominates the Semiconductor Foundry Market. As the demand for more efficient and cost-effective circuits grows, particularly for applications in mobile devices, data centers, and IoT, the 16/14 nm node provides a compelling balance of performance, power consumption, and manufacturing cost. This node offers considerable gains in power efficiency and transistor density over prior technologies, allowing manufacturers to create strong but energy-efficient products at a competitive price.

Smartphones, laptops, gaming consoles, and possibly some automotive applications will boost the use of 16/14 nm techniques in the Semiconductor Foundry Market. These devices and applications require great performance, power efficiency, and cost-effectiveness, all of which are entirely provided by the 16/14 nm technology node. As consumer demands for additional features and longer battery life grow, manufacturers are increasingly looking to these nodes to meet them. Furthermore, the increasing complexity of automotive electronics, as well as the requirement for dependable, efficient semiconductor solutions, drive up demand for 16/14 nm technologies, making them a critical market driver.

Which Factors Enhance the Use of Semiconductor Foundry Market?

Consumer electronics now dominates the Semiconductor Foundry Market. Consumer electronics, which includes a wide range of products such as smartphones, tablets, laptops, televisions, and wearables, is a major market that relies significantly on semiconductors for processing power, graphics rendering, and networking. The continual update cycle and desire for increasingly powerful features in these devices result in consistently high demand for semiconductors in this market.

Furthermore, the sheer volume of devices manufactured has a considerable impact on overall market share, demonstrating the importance of consumer electronics in the semiconductor market.

The automotive industry is undergoing a tremendous shift as a result of electrification and autonomous driving, necessitating the development of a new generation of powerful and reliable semiconductors designed specifically for automotive applications. Specialized chips are significantly used in components such as advanced driver assistance systems (ADAS), electric vehicle control units, and in-car entertainment systems. As the need for electric and self-driving vehicles grows, the demand for automotive-grade semiconductors is predicted to explode, making this segment the fastest-growing section of this market.

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Country/Region-wise Acumens

Will Established Manufacturing Hubs in Asia Pacific Region Prove Opportunistic for the Market?

Right now, the Asia Pacific region is king of the hill when it comes to semiconductor foundries. Think of it this wayAsia-Pacific's already got the established manufacturing hubs, so that's going to keep the market buzzing. You've got places like Taiwan and South Korea, with killer infrastructure and tons of experience, and they're home to the big guys who pretty much run the whole show. Back in 2020, Taiwan alone was responsible for 63% of the global foundry market, with TSMC grabbing 54% and Samsung in South Korea pulling in 18%. The Taiwan Semiconductor Industry Association (TSIA) even reported some serious revenue growth in Taiwan's integrated circuit (IC) industry, which just goes to show how crucial the region is to the whole global semiconductor supply chain. All that manufacturing power and brainpower? That's what reels in clients from all over the world and keeps the Asia-Pacific Semiconductor Foundry Market booming.

The Asia-Pacific Semiconductor Foundry Market is getting a major boost, thanks to government backing! Countries are pouring money into their semiconductor industries with helpful laws and big spending. Think about itChina's "Made in China 2025" initiative is promising a massive USD 150 Billion. South Korea's planning to drop USD 450 Billion by 2030 to really upgrade their game. And don't forget Taiwan's putting NT$161.07 billion (around US$5.7 billion) into semiconductor R&D over four years. Even Japan's getting in on the action with 70 billion yen (that's about USD 667 Million) in their 2021 budget to boost local manufacturing. All this government love is sparking innovation, building up our ability to make things, and really solidifying Asia-Pacific's spot as a major player in the global Semiconductor Foundry Market.

Will Growing Demand for Automotive Chips in the European Region Drive the Semiconductor Foundry Market?

Europe is the fastest-growing in the Semiconductor Foundry Market. The increase in need for automotive chips will drive growth in the European Semiconductor Foundry Market. As the automotive sector converts to electric and self-driving vehicles, there is an unprecedented demand for specialist automotive-grade semiconductors. The European Automobile Manufacturers Association (ACEA) estimated a 169% growth in electric vehicle registrations in the EU in 2020, with the European Commission aiming for at least 30 million zero-emission vehicles by 2030.

Furthermore, a Deloitte report predicts a 29% CAGR for the European electric car market until 2030, with 40 million units sold yearly. With the automotive sector already accounting for over 37% of the total semiconductor market in Europe, and modern automobiles requiring up to 3,000 chips each, this rise in demand for automotive semiconductors is expected to significantly boost the growth of the European Semiconductor Foundry Market.

The focus on innovative technologies will propel the European Semiconductor Foundry Market forward. As countries such as Germany and France focus on the development and deployment of cutting-edge semiconductor technology, there is an increasing demand for domestic foundry capabilities to support research, innovation, and advanced chip manufacturing. The European Commission seeks to expand the EU’s share of the world’s cutting-edge semiconductors to 20% in value by 2030, up from 10% in 2020, thanks to the European Chips Act, which proposes more than €43 billion in investment.

The German government’s €10 billion commitment to local chip production, as well as European corporations’ ambitions to increase their digital technology spending by 50% over the next three years, underscore this trend. This increase in investment and focus on innovation is likely to improve local foundry capabilities, resulting in significant growth in the European Semiconductor Foundry Market.

Competitive Landscape

The Semiconductor Foundry Market is a dynamic and competitive space, characterized by a diverse range of players vying for market share. These players are on the run for solidifying their presence through the adoption of strategic plans such as collaborations, mergers, acquisitions, and political support.

The organizations are focusing on innovating their product line to serve the vast population in diverse regions. Some of the prominent players operating in the Semiconductor Foundry Market.

Taiwan Semiconductor Manufacturing Company (TSMC) Limited, Foundries, United Microelectronics Corporation (UMC), Semiconductor Manufacturing International Corporation (SMIC), Samsung Group, Fujitsu Semiconductor Limited, STMicroelectronics NV, TowerJazz (Tower Semiconductor Limited), Vanguard International Semiconductor Corporation, X-FAB Silicon Foundries, Magnachip, United Microelectronics Corporation, Powerchip Semiconductor Manufacturing Corp.

Latest Developments

  • In December 2022, Taiwan Semiconductor Manufacturing Co (TSMC) announced a USD 40 billion investment in Arizona, up from a previously announced USD 12 billion. The Arizona plants have agreed to make 3-nm and 4-nm chips for iPhone processors.
  • In November 2022, Hua Hong Semiconductor Ltd. gained regulatory approval for a USD 2.5 billion IPO in Shanghai. The proposed IPO strategy comes as China’s chip makers braced for increased competition from the United States owing to geopolitical concerns. Hua Hong plans to invest in a new fabrication plant in Wuxi, beginning construction in 2023 and capable of producing 83,000 wafers per month.

Report Scope

REPORT ATTRIBUTESDETAILS
Study Period

2018-2031

Growth Rate

CAGR of ~6.50% from 2024 to 2031

Base Year for Valuation

2023

Historical Period

2018-2022

Forecast Period

2024-2031

Quantitative Units

Value in USD Billion

Report Coverage

Historical and Forecast Revenue Forecast, Historical and Forecast Volume, Growth Factors, Trends, Competitive Landscape, Key Players, Segmentation Analysis

Segments Covered
  • By Technology
  • By Foundry
  • By Application
Regions Covered
  • North America
  • Europe
  • Asia Pacific
  • Latin America
  • Middle East & Africa
Key Players

Taiwan Semiconductor Manufacturing Company (TSMC) Limited, Foundries, United Microelectronics Corporation (UMC), Semiconductor Manufacturing International Corporation (SMIC), Samsung Group, Fujitsu Semiconductor Limited, STMicroelectronics NV, TowerJazz (Tower Semiconductor Limited), Vanguard International Semiconductor Corporation, X-FAB Silicon Foundries

Customization

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Semiconductor Foundry Market, By Category

Technology

  • 10/7/5 nm
  • 16/14 nm
  • 20 nm

Foundry

  • Pure Play Foundry
  • IDMs

Application

  • Consumer Electronics
  • Automotive
  • Industrial
  • Telecommunications
  • Healthcare

Geography

  • North America
  • Europe
  • Asia-Pacific
  • South America
  • Middle East & Africa

Research Methodology of Market Research

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