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January 8, 2004 BULLETIN

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Communications Systems Drive IC Foundry Growth to 31% in 2003

IC Insights McClean Report 2004 details IC foundry industry trends

IC Insights’ McClean Report 2004 (scheduled for release on January 20, 2004) describes how communications applications (e.g., cellular phones, networking systems, etc.) are once again driving tremendous growth in the pure-play foundry market.

In 2003, the pure-play foundry IC market increased 31 percent, almost twice the total IC market growth of 16 percent. As shown in Figure 1, foundry sales to the communications market represented 38 percent of the total pure-play foundry IC market in 2003.

For 2004, IC Insights believes that the pure-play foundry business will surge 43 percent, a rate that would once again be significantly better than the forecasted total IC industry growth of 27 percent. Overall, pure-play foundry IC sales are expected to display a 23 percent compound annual growth rate (CAGR) from 2003 through 2008, 10 points higher than the total IC industry CAGR during the same timeframe.

In 2000, the shares of the pure-play foundries’ IC sales that went to computer and communications systems were equal at 39 percent. However, the pure-play foundry market was hard hit by the steep decline in communications equipment sales in 2001. In 2002, the foundries registered significant increases in sales to wireless communications customers. In 2002, the communications segment of the pure-play foundry business surged 30 percent primarily as a result of TSMC’s communications business jumping 58 percent.

In total, the pure-play foundry communications IC market exhibited 58 percent growth in 2003 (and was more than double the size of the 2001 pure-play foundry communications IC market). In fact, Chartered’s communications IC sales doubled in 2003 while TSMC’s and UMC’s 2003 communications IC sales increased 61 and 42 percent, respectively! In comparison, the pure-play foundry computer and consumer IC segments grew only 18 and 17 percent, respectively, in 2003. It appears that within the pure-play foundry industry, the communications IC market is back in the driver’s seat.



Figure 1

IC Insights’ new McClean Report 2004 will contain 700 pages and cover numerous aspects of the IC industry including individual IC product markets (e.g., DRAMs, ASICs, etc.), IC capacity and capital spending trends, IC company rankings, as well as IC technology and packaging analyses. Single-user copies of the report (binder or CD-ROM) are only $1,990, with company-wide licenses also available.

About IC Insights

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

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