Gartner Research

Forecast Analysis: Semiconductor Foundry Services, Worldwide

Published: 29 April 2019

ID: G00382443

Analyst(s): Samuel Wang

Summary

Following two years of nearly 10% growth, foundry revenue grew by 5.9% in 2018 and will have slower growth of 2.2% in 2019, reaching $64.3 billion. Competition in mature nodes intensifies as large foundries stop development efforts in the most leading technology.

Table Of Contents
  • Forecast Assumptions
  • Market Impacts
  • Notable Changes

Forecast Data Summary

Forecast Model Summary

Influencing Factors and Assumptions

  • Influencing Factor: End-Market Demand
    • Forecast Assumption: iPhone order cuts impact foundries with a 10% reduction of wafer demand in 1Q19.
    • Forecast Assumption: Chinese customers, concerned over a possible ban by the U.S. government, are restocking wafers early, providing a low single-digit recovery of foundry business in 2Q19.
  • Influencing Factor: Foundry Supply-and-Demand Balance by Technologies
    • Forecast Assumption: Strong demand for applications processors, GPU, MPU and AI in late 2019 will lead to 1x increase of 7 nm wafer shipments from 2018.
  • Influencing Factor: Foundry Capital Spending
    • Forecast Assumption: Foundry capex is lowed by $2 billion to $20.2 billion and $19.9 billion in 2019 and 2020, respectively, as spending by a few foundries becomes conservative on advanced nodes.
  • Influencing Factor: Foundry Pricing and Profitability
    • Forecast Assumption: Foundries are pushing out the purchase of raw wafers and are controlling manufacturing costs tightly as the fab utilization rate drops to 75% in 1H19.

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