Reflecting on the overall state of the semiconductor industry in the first quarter of 2009, the major ‘pure-play’ foundries hit bottom in revenues but strong growth from these lows is expected, according to a new report from iSuppli Corp. However, the foundry sector is expected to underperform the overall semiconductor industry in 2009, with foundries suffering a revenue decline of 26.5%. Global pure-play foundry revenue in the first quarter of 2009 fell by 57.7% from US$5.3 billion in the first quarter of 2008.
“The foundry market in the second quarter is benefitting from both a major reduction in semiconductor inventories throughout the electronics supply chain and innovative new designs requiring innovative technology,” said Len Jelinek, director and principal analyst, semiconductor manufacturing, for iSuppli. “However, while this growth will come as a relief to the foundries, it will not result in 2009 being a growth year for the foundry industry. Sustainable semiconductor growth will come only when the global economy recovers and consumers return to more normal patterns of purchases.”
Foundry revenue is set to rise to US$3.6 billion in the second quarter, up 59.3% from US$2.2 billion in the first. The increase follows a 1.8% sequential decrease in the third quarter of 2008, a 32.3% decline in the fourth quarter of 2008 and a 38.2% fall in the first quarter of 2009.
Small market share gains were noted by iSuppli in recent quarters, due in the main to acquisitions by some players, rather than from organic growth. In particular, Chartered Semiconductor and Tower Semiconductor gained share from buying a 200mm fab from Hitachi Semiconductor and Jazz Semiconductor, respectively.
Chartered managed to outperform the overall foundry market by limiting its year-over-year sales decline to 43.4%, according to the market research firm. Market share increased to 11.3% in the first quarter of 2009, up 2.8 points from 8.5% during the same period in 2008.
Tower’s revenue remained flat, allowing the company to expand its share by 1.5 points to 2.6%, up from 1.1 percent in the first quarter of 2008.
TSMC lost 1% market share in the first quarter of 2009 but still retained a significant 49% share of the foundry market.