Semiconductor Foundry Market Size, Share, Opportunities, And Trends By Technology Node (Smartphones2nm/3nm/4nm/5nm/7nm/10nm, 14nm/16nm, 20nm/28nm/40nm, 45nm/55nm/65nm, Others), By Application (AutomotiveConsumer Electronics, Automotive, Communication, Industrial, Aerospace, Others), And By Geography - Forecasts From 2023 To 2028

A semiconductor foundry or fab which is also referred to as a semiconductor fabrication plant is a factory which manufactures but does not design chips and integrated circuits (ICs) for other companies. The semiconductor foundry market is categorised into various segments which include -technology node, application and geographical location. Rising demand for semiconductor chips and ICs is one of the primary factors driving the growth of the foundry market.

The semiconductor industry is prospering as a result of the high demand for semiconductor chips by consumers. According to the World Semiconductor Trade Statistics database, the market for semiconductor chips is projected to be worth US$600 billion in 2022. Chips and ICs have become essential in many industries, driven by increasing semiconductor content in a variety of products, including vehicles, appliances, computers and data centres. Most of these companies that design such sophisticated chips do not have the infrastructure to manufacture them which rises the demand for semiconductor foundries.

The growing adoption of AI, IoT, and cloud-driven devices is driving the demand for semiconductor chips. Moreover, rising government investments to grow and improve semiconductor technology are fueling the expansion of the semiconductor foundry market.

However, the lack of skilled manpower, supply chain complexity, stringent rules and regulations by the government, and the high initial investment is obstructing the growth of the global market during the analysis period.

During the anticipation period, the rising demand for IoT and AI-enabled devices will support the growth of the global market during the projection period.

Semiconductors play a crucial role in enabling emerging technologies such as IoT and AI. The rising trend of Industry 4.0 has increased the demand for semiconductor chips, expanding the semiconductor foundry market.  Rapid technological progress, rising implementation of cloud technologies and availability of high speed have spurred the adoption of IoT technology in a wide range of industries. For instance, a report published by Ericsson says, the number of IoT-connected devices grew exponentially in 2021 and was expected to reach 500 million devices by the end of 2022. Sensors are a key component in connected devices, including consumer electronics like smartphones, tablets, and wearables. IoT devices will dramatically boost the need for sensors and integrated circuits since they are unable to function without semiconductors.

Continuous semiconductor product launches such as AI chips, and IoT modules are also propelling the demand for foundries. For instance, In October 2022, American tech giant IBM launched its first-ever AI chip for deep learning. The new IBM chip is faster and more efficient in training deep learning models than a general CPU. It is a semiconductor with ASIC design capabilities that can be programmed to do any deep learning activity, including processing spoken language. In January 2023, MediaTek launched its new chipset for IoT-enabled devices. The new semiconductor is an octa-core chip designed for smart homes and industrial IoT devices which is compatible with the Genio platform.

Various semiconductor foundry companies are collaborating with semiconductor companies to provide them with chip manufacturing and designing services and increase their output. For instance, in December 2022, American technology pioneer IBM and Japanese semiconductor foundry company Rapidus collaborated to form a strategic partnership to develop an advanced semiconductor technology ecosystem in Japan.

Asia Pacific is anticipated to hold a significant amount of the semiconductor foundry market share during the forecast period.

Asia Pacific region is anticipated to hold a significant market share in semiconductor foundry. This region will witness high growth during the forecast period owing to the well-established consumer electronics and semiconductor industry in countries such as South Korea, China and Japan. Rising government investment and initiatives to expand the semiconductor industry in countries such as India, Korea and China are driving the growth of the market in this region. The Government of India announced in September 2022, that they were planning to invest USD25 billion to expand the Indian semiconductor industry. In December 2022 Foxconn announced that it will build a semiconductor foundry in Gujarat. The Hon Hai Technology Company, popularly known as Foxconn, is anticipated to construct an approximately USD 20 billion semiconductor manufacturing unit in collaboration with Vedanta Group. The presence of key market players such as TSMC, Samsung Electronics and Rapidus is also propelling the growth of the semiconductor foundry market in this region. Prime markets in the Asia Pacific region are India, China, Japan, South Korea, Taiwan, Thailand and Indonesia.

Market Key Developments

• In November 2022, Hua Hong Semiconductor Ltd. gained regulatory permission for an IPO in Shanghai valued at USD 2.5 billion. Hua Hong plans to spend the funds in a new fabrication factory, or fab, in the eastern city of Wuxi. Construction is scheduled to start in 2023, and the fab will have a manufacturing capacity of 83,000 wafers per month once completed.
• In March 2023, X-Fab Silicon Foundries SE  a manufacturer of analogue and mixed-signal circuits and MEMS, signed Sarawak Microelectronics Design Semiconductor Sdn Bhd to provide chip design services. The agreement also validates X- Fab's development strategy for its Samajaya wafer fab, which calls for an increase in monthly output from 30,000 to 40,000 wafers by 2025.

Segmentation:  

• By Technology Node
  • Smartphones2nm/3nm/4nm/5nm/7nm/10nm
  • 14nm/16nm
  • 20nm/28nm/40nm
  • 45nm/55nm/65nm
  • Others
• By Application
  • AutomotiveConsumer Electronics
  • Automotive
  • Communication
  • Industrial
  • Aerospace
  • Others
• By Geography
  • North America
    • USA
    • Canada
    • Others
  • South America
    • Brazil
    • Others
  • Europe
    • Germany
    • UK
    • France
    • Others
  • Middle East and Africa
    • Israel
    • Others
  • Asia Pacific
    • China
    • Japan
    • South Korea
    • India
    • Taiwan
    • Thailand
    • Indonesia
    • Others