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(1) With the rise of vertical markets, systems companies will be a new force to be reckon with in the IC market
In addition to IDMs and fabless IC design houses, systems companies are gradually becoming important players in IC manufacturing. For instance, Apple now accounts for nearly 10% of the global foundry revenue, and this encourages other smartphone vendors to develop their own IC components. Data center operators are considering this option as well. ARM, for example, has collaborated with several major data center operators with various degrees of progress. The advent of the Internet of Things will demand systems companies to assert greater control over the vertical markets that they are developing. Hence, systems companies will also exert greater influence over IC manufacturing and have greater control over IC products used in their businesses.
(2) Regional markets will push for local manufacturing but trade agreements will determine the geographical distribution of semiconductor production
China has been aggressively conducting investment, merger and acquisition deals with foreign semiconductor companies since its government released “Guidelines to Promote IC Industry Development” last year. Some of the landmark deals made by the Chinese this year included the acquisitions of STATS ChipPAC and OmniVision. Moreover, the state-backed Chinese technology conglomerate Tsinghua Unigroup has been actively investing in the NAND Flash industry. Besides China, India and Indonesia have also heavily promoted local manufacturing and their governments are developing massive support programs to fulfill their respective policy agendas. On the other hand, the increasing number of free trade agreements signed by countries around the world will weaken tariff barriers and diminish the effects of national industrial policies on international markets. TrendForce concludes that the combination of these factors will cause shifts in the geographical distribution of semiconductor manufacturing.
