Revenues of global contract chipmakers including Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) could be 21 percent higher next year because consumers could start shopping for new electronic devices again after the global economy recovers from the slump, market researcher iSuppli Corp said yesterday.
Next year, global contract chipmakers could see their revenues rebound to US$21.6 billion, from an estimate of US$17.8 billion this year, iSuppli forecast. The growth rate would outperform overall semiconductor companies, which are expected to see revenue increases of 13.8 percent annually next year, iSuppli’s projection showed.
“Innovation continues both in end-product design and manufacturing technology. As consumers return to stores, this innovation will likely result in new and different products on the shelves, helping to sustain some semblance of recovery, even if it is delayed into 2010,” iSuppli chief semiconductor analyst Len Jelinek said in the report.
In addition, integrated design manufacturers expanded their proven asset-light programs last year amid a severe industrial slump, helping contract chipmakers gain more orders and customers, iSuppli said.
“However, next year is likely to bring a new set of challenges as the rising cost of competition winnows down the number of players in the market,” Jelinek said.
As the cost of developing and implementing next-generation processes for a variety of technologies is rising rapidly, the only way to outperform the market is to stay at the cutting edge of semiconductor process development, iSuppli said.
“Only companies of sufficient size can support these costs,” Jelinek said.
Recently, the landscape of the foundry industry has been permanently reshaped by a wave of mergers and acquisitions, the researcher said, adding that it was possible that only three top-tier players would be on the market in the future.
The proposed acquisition of Chinese contract chipmaker He Jian (Suzhou) Co (和艦) by Taiwan’s United Microelectronics Corp (UMC, 聯電) would put UMC back into the No. 2 position among global contract chipmakers, a position it lost to GlobalFoundries Inc this year, iSuppli said.
Last month, GlobalFoundries’ major stakeholder, Advanced Technology Investment Co LCC of Abu Dhabi, signed an agreement with Chartered Semiconductor Manufacturing to acquire the Singaporean chipmaker for US$1.8 billion. The deal, which is set to close next quarter, would help GlobalFoundries gain its core competence along with five 8-inch plants and one 12-inch facility, iSuppli said.
China’s biggest chipmaker, Semiconductor Manufacturing International Corp (SMIC, 中芯), could acquire Cension Semiconductor Manufacturing International (成芯) and Wuhan Xinxin Semiconductor Manufacturing Corp (武漢新芯), two companies it is managing, the researcher said.
Small chipmakers such as Silterra, Altis and Landshunt were struggling and have become the subject of M&A speculation, it said.
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