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JANUARY 17, 2007

Fabless Suppliers Captured 20% of Worldwide IC Market in 2006

Marketshare doubled from 10% held in 2000!

According to data in IC Insights’ newly released 2007 edition of The McClean Report, A Complete Analysis and Forecast of the Integrated Circuit Industry, fabless IC suppliers secured 20% of worldwide IC sales in 2006, an increase from just under 10% of the total IC market in 2000 (Figure 1). Moreover, IC Insights forecasts that, in 2011, fabless IC companies will command at least 25% of the total IC market, especially as large companies like LSI Logic and Agere continue to become fabless, or fab-lite, over the next few years.

Unlike the relatively close annual market growth relationship between fabless IC suppliers and foundries, fabless IC company sales growth versus worldwide IC market growth has typically been very different. According to the new edition of The McClean Report, fabless IC suppliers in total increased their sales by 16% in 2006, 7 points greater than the overall IC market growth rate of 9%. Historically, fabless company IC sales growth rates have been much better, or the declines less severe, than those registered in the overall IC market.

From 1998 through 2006, the worldwide IC market displayed a 9% average annual growth rate. In contrast, total IC sales from the fabless IC companies during this same timeframe increased at almost three times this rate and registered a very strong 25% CAGR. As a result of this trend, fabless IC company sales increased almost 6X from 1998 to 2006 (from $7.3 billion to $42.3 billion) whereas the total IC market increased only 93% in this same timeperiod (from $109.1 billion to $211.0 billion).

Given the big disparity in the 1998-2006 CAGRs between the fabless IC suppliers and the IDMs (integrated device manufacturers), it comes as little surprise that fabless IC companies are quickly increasing their share of the total IC market. Overall, fabless IC suppliers, and the IC foundries that serve them, are becoming a larger force in the total IC industry.

Figure 1

Report Details

The 2007 edition of IC Insights’ McClean Report (A Complete Analysis and Forecast of the Integrated Circuit Industry) is scheduled for release within the next two weeks. Packed with over 400 tables and graphs, the report will be available in three-ring binder, CD-ROM, and on-line formats. A bundled binder-CD set is priced at $3,085. A CD-ROM or binder by itself costs $2,590. An Internet access password is available as a $695 option. The report is also available under a multi-user corporate license for $5,490.

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About IC Insights

IC Insights, Inc., based in Scottsdale, Arizona, is dedicated to providing high-quality, cost-effective market research for the semiconductor industry. Founded in 1997, IC Insights offers coverage of global economic trends, semiconductor market forecasts, capital spending and fab capacity trends, product market details, and technology trends, as well as complete IC company profiles and evaluations of end-use applications driving demand for ICs.

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