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Communications Rise to Represent Largest Portion of Foundry Sales
October 19, 2018 | IC InsightsEstimated reading time: 1 minute
With the tremendous growth of smartphones over the past decade, foundry sales to the communications market have soared and are now forecast to account for about three times more than IC foundry sales to the computer market in 2018, based on IC Insights’ extensive part-two analysis of the integrated circuit foundry business in the September update to the 2018 McClean Report.
Ten years ago, computers/computing systems were easily the largest application for pure-play IC foundry sales, but a relatively flat tablet PC market and lackluster desktop and notebook PC sales since 2011 contributed to weak pure-play foundry sales into the computer segment.
Now, new server applications targeting artificial intelligence (AI), the Internet of Things, Cloud Computing, and cryptocurrency are forecast to breathe new life into this market segment over the next five years. TSMC expects its IC sales into the IoT segment will grow by a CAGR of more than 20% from 2017 through 2022 (the company had greater than $1.0 billion in IoT sales in 2017).
Although IC foundry sales for computer applications are expected to surge 41% this year (driven by TSMC’s cryptocurrency device sales), the communications foundry market is still expected to be about 3x the size of the computer segment in 2018. The communications foundry market is forecast to display only a 2% growth rate in 2018, six points less than the total pure-play foundry market growth rate expected for this year.
Overall, the communications (52%), computer (19%), and consumer (13%) market segments are forecast to represent 84% of the pure-play IC foundry market in 2018.
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