Semiconductor Foundry Market Size & Share Analysis - Growth Trends & Forecasts (2023 - 2028)

The Report Covers Global Chip Foundry Companies & Share and the Market is segmented by Technology Node (10/7/5 nm, 16/14 nm, 20 nm, 28 nm, 45/40 nm, 65 nm), by Application (Consumer Electronics and Communication, Automotive, Industrial, HPC), and by Geography (North America, Europe, Middle East and Africa, Asia Pacific). The market sizes and forecasts are provided in terms of value (USD billion) for all the above segments.

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Semiconductor Foundry Market Size

Semiconductor Foundry Market Summary
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Study Period 2018 - 2028
Market Size (2023) USD 143.12 Billion
Market Size (2028) USD 203.94 Billion
CAGR (2023 - 2028) 7.34 %
Fastest Growing Market Asia-Pacific
Largest Market North America

Major Players

Semiconductor Foundry Market Major Players

*Disclaimer: Major Players sorted in no particular order
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Semiconductor Foundry Market Analysis

The Semiconductor Foundry Market size is expected to grow from USD 143.12 billion in 2023 to USD 203.94 billion by 2028, at a CAGR of 7.34% during the forecast period (2023-2028).

The semiconductor industry witnessed exponential growth during the year 2021, which was driven by global consumer demand. Similarly, the semiconductor foundry market witnessed significant growth in 2021, with over 25% growth. The foundry market witnessed even higher growth during 2022 owing to firm orders for the product innovations to come in 2023. However, the market is expected to slow down rapidly in 2023 due to lower consumer electronics demand and declining player orders.

  • Technology inflections such as the Internet of Things (IoT), cloud computing, and Artificial Intelligence (AI) are driving up the long-term demand for the chip industry. For instance, AI is creating new opportunities for the semiconductor industry as many AI applications rely on hardware as a core enabler of innovation, especially for logic and memory functions. The demand for chips related to the rapidly growing use of AI is expected to contribute significantly to the industry's overall growth.
  • According to Sandra Rivera, Head of Intel's data center and AI, starting in 2022, the AI chip market has been estimated to grow by around 25% a year in the next five years to reach about USD 50 billion. Also, in May 2022, Intel launched the Gaudi2 chip focused on artificial intelligence, aiming to capture a larger share of the AI chip market.
  • Increased adoption of IoT devices, combined with the ongoing Industry 4.0 trend, the use of big data analytics for semiconductor manufacturing, the need for better insights for business planning, and the surge in the adoption of social media analytics tools are expected to provide lucrative opportunities for market expansion during the forecast period.
  • Slowing innovation may lead to fewer new users adopting the technology, reducing the money chipmakers have for funding new developments. This may create a self-reinforcing cycle that steadily makes the economics of universal chips less attractive, slowing down technical progress.
  • The COVID-19 outbreak and the corresponding rise in remote work and education have increased network demand, accelerating the need for more robust and reliable networks. With the corresponding upsurge in demand for streaming entertainment at home, the need for stronger networks and new technologies such as 5G has increased significantly. This is creating a substantial demand for 5G-enabled devices, like smartphones, and in turn, for the semiconductor chips specifically designed for such devices. Semiconductor devices are being used in various forms and shapes across end-user industries to drive performance in critical sectors, and they have proven essential in supporting the world through the pandemic.

Semiconductor Foundry Industry Segmentation

A semiconductor foundry, also called a fab and fabrication plant, refers to a factory where devices, like integrated circuits (ICs), are manufactured. Both pure-play foundries (foundries that do not offer products of their own) and IDMs (players that design and produce their products) are considered a part of the study.

The study tracks the revenue accrued from the semiconductor foundries used across consumer electronics and communication, automotive, industrial, and HPC applications. Also, the revenue accrued from the semiconductor foundry vendors has been considered along with the COVID-19 impact on market projection. Revenue generated from regions such as North America, Europe, the Middle East & Africa, and Asia-Pacific is considered in the geography segment. The market is also segmented by technology node (10/7/5 nm, 16/14 nm, 20 nm, 28 nm, 45/40 nm, 65 nm). The market sizes and forecasts are provided in terms of value (USD billion) for all the above segments.

By Technology Node
10/7/5 nm
16/14 nm
20 nm
28 nm
45/40 nm
65 nm
Other Technology Nodes
By Application
Consumer Electronics and Communication
Automotive
Industrial
HPC
Other Applications
By Geography
North America
Europe, Middle East and Africa
Asia Pacific

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Semiconductor Foundry Market Trends

This section covers the major market trends shaping the Semiconductor Foundry Market according to our research experts:

Automotive, IoT, and AI Sectors are Driving the Market

  • Owing to the increasing availability of high-speed connectivity, rising cloud adoption, and increasing use of data processing and analytics, the adoption of the Internet of Things (IoT) is growing steadily. For instance, as per Ericsson, there were 1.9 billion cellular IoT connections in the world in 2022, which is expected to grow to 5.5 billion in 2027, registering a CAGR of 19% over the period.
  • The rising adoption of the Internet of Things is one of the primary factors driving the growth of the market studied. Connected devices, from consumer-oriented technologies such as smartphones, tablets, cars, and wearables, to industrial machinery, rely on data-collecting components like sensors. As IoT devices cannot work without semiconductors, they will significantly increase the demand for sensors, connectivity, memory, microcontrollers, and integrated circuits.
  • The global demand for connected cars is increasing at a fast pace, and a prominent share of all the new passenger vehicles produced in recent times comprise connected solutions. For instance, some of the major automakers in the world, such as Audi and BMW, entered the connected market in 2021 and 2022 by launching models like the Audi A7L/A6L and BMW iX, respectively. The demand for vehicles with in-vehicle cellular capabilities is rising at a rapid pace, thereby driving the demand for semiconductor components in the industry.
  • The automotive industry is among the most automated industries worldwide and is witnessing an increasing demand for robotics and various automated solutions. This is expected to drive the demand in the market studied.
  • The growing trend of adoption of connected devices in residential and industrial sectors is augmenting the demand for semiconductors in the market. For instance, Telia Company witnessed a 30% Y-oY increase in IoT devices on its networks throughout the Nordics and Baltics in 2021. This was more than double the growth compared to the previous year.
  • Increased adoption of IoT devices, combined with the ongoing Industry 4.0 trend, the use of big data analytics for semiconductor manufacturing, the need for better insights for business planning, and the surge in the adoption of social media analytics tools are expected to provide lucrative opportunities for market expansion during the forecast period.
Semiconductor Foundry Market - Estimated Number of loT Connections, in Billion, by type, Global, 2021-2027

Asia Pacific to Witness Fastest Growth

  • Asia-Pacific region holds a prominent share of semiconductor foundries globally, with the region having its presence of major companies such as TSMC, Samsung Electronics, etc. Countries such as Taiwan, South Korea, Japan, and China have a significant market share. Taiwan holds the major share of the foundries in the world by country and is a vital region in the semiconductor value chain.
  • Asian nations produce most semiconductors, accounting for around 75% of global production. In order to meet the constantly growing demands of various industries worldwide, players from all over the world are seeking to increase their production capacity and are making significant investments in cutting-edge manufacturing technologies. China is the largest Single-country market in the region and has a complicated market with many different characteristics.
  • The dominance of China's domestic enterprises in cellphones, PCs, and consumer electronics has been a major factor in the country's growth as a substantial supplier of semiconductor demand. Due to the widespread use of semiconductors, the Chinese government, which has a significant presence in the global semiconductor market, is implementing significant federal incentive schemes.
  • Moreover, India has emerged as one of the fastest-growing global economies due to its large population. According to projections, the automotive semiconductor market in the country is expected to increase rapidly in the future. The automotive industry is complemented by a strong semiconductor R&D infrastructure, which is expected to open new potential for the automotive semiconductor market in India in the future. Furthermore, India is setting up commercial semiconductor wafer fab units.
  • India is planning to launch a chip fab industry with the aid of hefty incentives and assistance from Foxconn in Taiwan. For instance, Foxconn declared in December 2022 that it would construct a semiconductor fabrication facility in Gujarat. In a partnership with commodities behemoth Vedanta Group, Taiwan's Hon Hai Technology Group, also known as Foxconn, which already produces Apple iPhones in the nation, is expected to build a roughly USD 20 billion semiconductor fabrication plant on the site. Foxconn already produces Apple iPhones in the nation. Indian officials are hoping to see construction begin next year and for operations to begin around 2025.
Semiconductor Foundry Market - Growth Rate by Region

Semiconductor Foundry Industry Overview

The levels of market penetration for existing top 5 vendors are significantly high, and these vendors compete to gain higher market share each year. Owing to the consolidated nature of the market, foundries in the industry are competing intensely to gain access to fabless vendor deals to expand their presence and market share further. In addition, these players are increasingly investing in increasing their production capabilities.

For instance, in December 2022, Taiwan Semiconductor Manufacturing Co (TSMC) announced that it would more than triple its planned investment in Arizona, United States, to USD 40 billion from a previously announced USD 12 billion. The Arizona plants would produce 3-nm and 4-nm chips used for iPhone processors.

Similarly, in December 2022, Samsung Electronics Ltd. announced plans to step up chip production capacity at its largest semiconductor fabrication plant in South Korea in 2023.

Furthermore, in December 2022, EPC and Vanguard International Semiconductor Corporation (VIS) announced a multi-year production agreement for gallium nitride-based power semiconductors. EPC will take advantage of VIS' 8-inch (200 mm) wafer fabrication capabilities, which is expected to significantly increase manufacturing capacity for EPC's high-performance GaN transistors and integrated circuits. Production will begin in early 2023.

Semiconductor Foundry Market Leaders

  1. Taiwan Semiconductor Manufacturing Company (TSMC) Limited

  2. Globalfoundries Inc.

  3. United Microelectronics Corporation (UMC)

  4. Semiconductor Manufacturing International Corporation

  5. Samsung Electronics Co. Ltd (Samsung Foundry)

*Disclaimer: Major Players sorted in no particular order

Semiconductor Foundry Market Concentration

Semiconductor Foundry Market News

  • November 2022: Hua Hong Semiconductor Ltd received regulatory approval for USD 2.5 billion IPO in Shanghai. The planned initial public offering (IPO) comes as China’s chip companies gear up for steeper competition with the United States due to geopolitical tensions. Due to this, Hua Hong intends to use the money to invest in a new fabrication plant - or fab - in the eastern city of Wuxi, with construction set to begin in 2023 and an eventual production capacity of 83,000 wafers per month.
  • October 2022: Siemens partnered with TSMC for 3 nm product certifications and other technology milestones. Siemens is pleased to extend this partnership with the recent certifications of Siemens’ design platforms for TSMC’s newest and most advanced semiconductor process technologies. Siemens’ long and prolific partnership with TSMC continues to help its joint customers deliver highly innovative and differentiated ICs.
  • September 2022: United Microelectronics Corporation (UMC) and Avalanche Technology, a next-generation MRAM technology provider, launched new high-reliability persistent SRAM (P-SRAM) memory devices. The new device will be integrated with UMC’s 22nm process technology and based on Avalanche Technology’s latest generation of Spin Transfer Torque Magnetoresistive RAM (STT-MRAM) technology. In line with this launch, the company will offer its customers significant density, reliability, endurance, and power benefits over existing non-volatile solutions.

Semiconductor Foundry Market Report - Table of Contents

  1. 1. INTRODUCTION

    1. 1.1 Study Assumptions and Market Definition

    2. 1.2 Scope of the Study

  2. 2. RESEARCH METHODOLOGY

  3. 3. EXECUTIVE SUMMARY

  4. 4. MARKET INSIGHTS

    1. 4.1 Market Overview

    2. 4.2 Industry Attractiveness - Porter Five Forces

      1. 4.2.1 Bargaining Power of Suppliers

      2. 4.2.2 Bargaining Power of Consumers

      3. 4.2.3 Threat of New Entrants

      4. 4.2.4 Threat of Substitutes

      5. 4.2.5 Intensity of Competitive Rivalry

    3. 4.3 Foundry Capacity Utilization Trends

    4. 4.4 Industry Value Chain Analysis

    5. 4.5 Impact of COVID-19 on the Market

  5. 5. MARKET DYNAMICS

    1. 5.1 Market Drivers

      1. 5.1.1 Optimization of Semiconductor Processes through Analytics

      2. 5.1.2 Automotive, IoT, and AI Sectors are Driving the Market

    2. 5.2 Market Challenges

      1. 5.2.1 Moores Law is About Reaching Its Physical Limitation

  6. 6. MARKET SEGMENTATION

    1. 6.1 By Technology Node

      1. 6.1.1 10/7/5 nm

      2. 6.1.2 16/14 nm

      3. 6.1.3 20 nm

      4. 6.1.4 28 nm

      5. 6.1.5 45/40 nm

      6. 6.1.6 65 nm

      7. 6.1.7 Other Technology Nodes

    2. 6.2 By Application

      1. 6.2.1 Consumer Electronics and Communication

      2. 6.2.2 Automotive

      3. 6.2.3 Industrial

      4. 6.2.4 HPC

      5. 6.2.5 Other Applications

    3. 6.3 By Geography

      1. 6.3.1 North America

      2. 6.3.2 Europe, Middle East and Africa

      3. 6.3.3 Asia Pacific

  7. 7. COMPETITIVE LANDSCAPE

    1. 7.1 Company Profiles

      1. 7.1.1 Taiwan Semiconductor Manufacturing Company (TSMC) Limited

      2. 7.1.2 Globalfoundries Inc.

      3. 7.1.3 United Microelectronics Corporation (UMC)

      4. 7.1.4 Semiconductor Manufacturing International Corporation (SMIC)

      5. 7.1.5 Samsung Electronics Co. Ltd (Samsung Foundry)

      6. 7.1.6 Dongbu Hitek Co. Ltd

      7. 7.1.7 Intel Corporation

      8. 7.1.8 Hua Hong Semiconductor Limited

      9. 7.1.9 Powerchip Technology Corporation

      10. 7.1.10 STMicroelectronics NV

      11. 7.1.11 Tower Semiconductor Ltd

      12. 7.1.12 Vanguard International Semiconductor Corporation

      13. 7.1.13 X-FAB Silicon Foundries

      14. 7.1.14 NXP Semiconductors NV

      15. 7.1.15 Renesas Electronics Corporation

      16. 7.1.16 Microchip Technologies Inc.

      17. 7.1.17 Texas Instruments Inc.

    2. *List Not Exhaustive

  8. 8. VENDOR MARKET SHARE ANALYSIS - PUREPLAY COMPANIES

  9. 9. INVESTMENT ANALYSIS

  10. 10. FUTURE OF THE MARKET

**Subject to Availability
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Semiconductor Foundry Market Research FAQs

The Semiconductor Foundry Market size is expected to reach USD 143.12 billion in 2023 and grow at a CAGR of 7.34% to reach USD 203.94 billion by 2028.

In 2023, the Semiconductor Foundry Market size is expected to reach USD 143.12 billion.

Taiwan Semiconductor Manufacturing Company (TSMC) Limited, Globalfoundries Inc., United Microelectronics Corporation (UMC), Semiconductor Manufacturing International Corporation and Samsung Electronics Co. Ltd (Samsung Foundry) are the major companies operating in the Semiconductor Foundry Market.

Asia-Pacific is estimated to grow at the highest CAGR over the forecast period (2023-2028).

In 2023, the North America accounts for the largest market share in the Semiconductor Foundry Market.

Semiconductor Foundry Industry Report

Statistics for the 2023 Semiconductor Foundry market share, size and revenue growth rate, created by Mordor Intelligence™ Industry Reports. Semiconductor Foundry analysis includes a market forecast outlook to 2028 and historical overview. Get a sample of this industry analysis as a free report PDF download.

Semiconductor Foundry Market Report Snapshots

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