Global semiconductor foundry market revenue in 2Q19 is expected to be US$15.4 billion, a drop of 8 percent compared to the same period in 2018. Market leader TSMC is expected to outperform its rivals and only drop 4 percent, thereby regaining market share it previously lost (see TSMC loses market share in top ten foundry ranking).

By maintaining its revenue Hua Hong Grace has outperformed even TSMC in the 2Q19 ranking and overtaken Vanguard International Semiconductor Corp. rising to seventh position. Vanguard suffered from a lack of 300mm wafer production capacity, TrendForce said. At the same time Powerchip Semiconductor Manufacturing Corp. has suffered and fallen to ninth position from seventh a year before.

Top ten foundries ranked by 2Q19 revenue ($millions). Source: TrendForce.

TSMC is enjoying demand for its 7nm manufacturing process and may have seen some stockpiling of chips by Huawei. However the fact that the US Department of Commerce has placed Huawei on the so called entity list is causing other companies to distance themselves from Huawei. This is likely to impact the foundry market, including TSMC, in the 2H19.

The World Bank has cut its global GDP prediction from 2.9 percent given in January to 2.6 percent. The International Monetary Fund has cuts is prediction from 3.6 percent to 3.1 percent. A weaker global economy has consequences for the semiconductor industry and TrendForce reckons total revenue in the foundry sector in 2019 will fall by 3 percent compared with 2018.

That contraction for the foundry industry would be the first in a decade.

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