Top 10 Foundries Post Record 4Q21 Performance for 10th Consecutive Quarter

Article By : TrendForce

The output value of the world's top 10 foundries in 4Q21 reached $29.55 billion, up by 8.3% QoQ, according to TrendForce.

The output value of the world’s top 10 foundries in the fourth quarter of last year (4Q21) reached $29.55 billion, up by 8.3% quarter-on-quarter (QoQ), according to TrendForce’s latest analysis.

The analyst firm attributes this to two major factors: the limited growth in overall production capacity, and the rising average selling price (ASP). At present, the shortage of certain components for TVs and laptops has eased but there are other peripheral materials derived from mature process such as PMIC, Wi-Fi, and MCU that are still in short supply, precipitating continued fully loaded foundry capacity. Meanwhile, more expensive wafers were produced in succession in the fourth quarter, led by Taiwan Semiconductor Manufacturing Co. Ltd (TSMC), and foundries continued to adjust their product mix to increase ASP. In terms of changes in this quarter’s top 10 ranking, Nexchip overtook the incumbent DB Hitek to clinch 10th place.

TrendForce believes that the output value of the world’s top 10 foundries will maintain a growth trend in 1Q22, but appreciation in ASP will still be the primary driver of said growth. However, since there are fewer first quarter working days in the Greater China Area due to the Lunar New Year holiday and this is the time when some foundries schedule an annual maintenance period, 1Q22 growth rate will be down slightly compared to 4Q21.

Looking at the top five industry players, TSMC’s 4Q21 revenue reached $15.75 billion, a QoQ increase of 5.8%. Although 5nm revenue spiked thanks to the new iPhone, 7/6nm revenue dropped due to a weak Chinese smartphone market, becoming the only TSMC node in decline in 4Q21, and inducing a contraction in TSMC revenue growth in 4Q21, though TSMC still accounts for more than 50% of global market share. As one of TSMC’s few competitors in advanced processes below 7nm, Samsung strengthened 4Q21 revenue to $5.54 billion, a quarterly increase of 15.3% owing to the gradual completion of new advanced 5/4nm process capacity and the mass production of new flagship products from major client Qualcomm. Although Samsung’s foundry business has posted record revenue, the slower ramp-up of advanced process capacity continues to erode overall profitability. Therefore, TrendForce believes that improving advanced process capacity and yield in 1Q22 is one of Samsung’s top priorities.

Constrained by limited growth in new production capacity and the fact that the new wave of wafers contracted at the latest pricing has yet to be produced, United Microelectronics Corp.’s (UMC) revenue stalled slightly in 4Q21, to $2.12 billion, up 5.8% QoQ.

GlobalFoundries benefited from the release of new production capacity, product mix optimization, and new long-term agreement (LTA) pricing, pushing up ASP performance. Revenue in 4Q22 hits $1.85 billion, up 8.6% QoQ. Semiconductor Manufacturing International Corp. (SMIC) posted 4Q21 revenue of $1.58 billion, 11.6% QoQ, due to mounting demand for products such as HV, MCU, Ultra Low Power Logic, and Specialty Memory as well as factors such as product mix adjustment and appreciating ASP.

The foundries ranked 6th to 9th are HuaHong Group, Powerchip Semiconductor Manufacturing Corp. (PSMC), Vanguard International Semiconductor (VIS), and Tower Semiconductor (Tower), respectively. Each has benefiting from factors such as a utilization rate uniformly at full capacity, release of new production capacity, and adjustment of ASP and product mix, sustaining the growth of revenue performance. It is worth mentioning, the acquisition of Tower by Intel Corp. netted Intel mature process technologies and a customer base and expanded the diversity and production capacity of its foundry business. However, before this transaction is officially completed, Tower is still considered an independent entity in terms of the accounting process. TrendForce states, after Intel’s foundry business is properly integrated with Tower, Intel will officially enter the ranking of top ten foundries.

Coming in 10th on foundry ranking is Nexchip, with revenue of $352 million and a quarterly growth rate of 44.2%, the fastest growth rate among the top 10, and officially surpassed DB Hitek. According to TrendForce analysis, the primary reason Nexchip was able to break into the top 10 in 4Q21 was the company’s diligent production expansion. Nexchip also plans to develop more advanced processes such as the 55/40/28nm nodes and multiple product lines including TDDI, CIS, and MCU, to compensate for its current single product line and limited customer base. Since Nexchip is currently ramping-up operations quickly, its growth performance in 2022 should not be underestimated.

 

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