Of the $4.2 billion annual increase, 51 percent will be generated by Chinese business with a lot of that being cryptocurrency ASICs, the market research firm said. China's total share of consumption of the 2018 pure-play foundry market is expected to rise to 19 percent up from 14 percent in 2017. As a result China's market share will exceed that held by the rest of the Asia-Pacific region for the first time.
The biggest increase in sales to China was at foundry TSMC. Following a 44 percent jump in 2017, TSMC's sales into China are forecast to surge by 79 percent in 2018 to $6.7 billion making Chinese customers responsible for about one fifth of TSMC's sales in 2018.
Pure-play foundry market by region. Source: IC Insights.
Again a large part of the consumption is based on custom ICs being designed and manufactured for cryptocurrency mining, which appears to be a peculiarly Chinese thing.
TSMC's surging Chinese sales. Source: IC Insights.
TSMC has said that demand for cryptocurrency ICs is highly dependent on the price of various cryptocurrencies and that it expects reduced sales in this area in 2H18. It is notable that the Bitcoin has gone from a value of more than $15,000 in January 2018 to less than $7,000 in September. TSMC does not incorporate cryptocurrency business assumptions into its forecasts for future long-term growth.
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