The foundry market is set to achieve a third year of 20 percent growth in 2022, according to IC Insights.

After dropping 2 percent in 2019, the foundry market logged a 21 percent rebound in 2020 as application processor and other telecommunications device sales into 5G smartphones acted as strong drivers. The foundry market continued its growth surge in 2021, registering a 26 percent jump.

Annual foundry sales and growth 2016 to 2022. Source: IC Insights.

The market researcher reckons the foundry market was worth $110 billion in 2021 and will expand to $132 billion in 2022.

IC Insights said it does not expect another pure-play foundry market decline over the next five years.  

Chinese aspirations

As a result although Chinese foundries are investing in production capacity they are making slow progress acquiring market share.

In 2020, a 25 percent increase in sales by SMIC was not enough to prevent a decline of the Chinese foundries’ share of the total pure-play foundry market to 7.6 percent.  In 2021, SMIC’s sales jumped by 39 percent as compared to a total foundry market increase of 26 percent. Moreover, Huahong Group saw its sales growth rate last year increase at 52 percent, twice the rate as the total foundry market

Chinese foundries’ share total foundry market 2002 to 2026 (forecast). Source: IC Insights.

As a result, the Chinese company share of the pure-play foundry market increased by 0.9 points to 8.5 percent in 2021. However, over the coming years IC Insights expects progress to be slow. Partly this is because US export controls are preventing Chinese fabs from gaining access to extreme ultraviolet lithography. As a result Chinese foundries cannot move on to the highest-value single-digit nanometer manufacturing process technologies.

IC Insights expects Chinese foundries are to hold 8.8 percent of the pure-play foundry market in 2026.

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