By 2020, the global semiconductor casting sector delivered above-expected revenue growth. Market research firm Counterpoint Research forecasts growth will grow 12% from 2020, with total revenue reaching $ 92 billion.
In addition to the effects of the Covid-19 epidemic leading to logistical challenges and trade tensions leading to increased wafer reservations, rapid development of advanced 7nm and 5nm technological processes is in place. In response to the growing demand of 5G smartphones, game consoles, and graphics processing units (GPUs) in cloud servers have also fueled growth in the semiconductor casting industry globally during the period. next.
Counterpoint Research has made four predictions for the global semiconductor foundry industry in 2021.
Global semiconductor foundry revenue in 2021 will grow double digits compared to 2020
In 2020, revenue of the semiconductor casting industry will reach about 82 billion USD, up 23% over the same period last year. Despite the high growth achieved in 2020, Counterpoint Research still forecasts growth in 2021 will increase 12% from 2020 and reach total revenue of 92 billion USD.
|The global semiconductor foundry industry will grow strongly by 2021|
Accordingly, the world’s leading semiconductor casting company TSMC of Taiwan will continue to lead the global semiconductor industry in 2021 with a forecast growth of 13% -16% compared to 2020. And casting company South Korean semiconductor Samsung Foundry will increase sales by 20% compared to 2020 thanks to an increase in orders from Qualcomm and Nvidia.
For the whole semiconductor industry, double-digit growth by 2021 includes both an increase in wafer shipments and an increase in wafer prices, something we rarely see in previous cycles. In particular, the 8 inch foundries have reported supply shortages since the second half of 2020, which are acting as a catalyst for some suppliers to increase their average wafer price by 10% by year 2021.
7nm and 5nm process chip using EUV technology will see strong growth in 2021
Both TSMC and Samsung will beat the semiconductor foundry average growth as they are accelerating production of 7nm and 5nm process technology chips using ultraviolet (EUV) etching equipment, after pass the initial testing phase in 2019 and 2020. The adoption of EUV is a key factor to continuously increase the chip’s transistor density to enable the development of both 5G smartphones and applications. High performance computing (HPC).
5nm process technology:TSMC and Samsung has started mass production of 5nm process chips since 2020. Based on Counterpoint Research estimates, the total shipments of 5nm wafers will account for 5% of 12-inch wafers in the global semiconductor foundry industry by 2021. , an increase from less than 1% of the year 2020.
Apple is TSMC’s top customer for 5nm process chips this year, including the A14 and A15 chips for the iPhone and newly released Apple Silicon. Qualcomm will be the second largest 5nm customer as the iPhone 13 can adopt the X60 modem. TSMC is expected to generate $ 10 billion in revenue from 5nm process by 2021. Samsung Foundry will also achieve good growth thanks to many orders for 5nm process chip, including internal SoC (Exynos) and Qualcomm. . Market research firm Counterpoint Research forecasts capacity utilization rates will average 90% for TSMC and Samsung by 2021 thanks to the strong growth of high-end 5G phones.
|Market share of 5nm Wafer panels by customer in 2021|
7nm process technology: Unlike 5nm, with more than 80% of wafers being used in smartphones, 7nm applications are used more widely, such as in GPUs, CPUs, networking equipment and automotive processors. Based on Counterpoint Research estimates, the total 7nm wafer shipment volume will account for 11% of the 12-inch wafer volume in the global foundry industry by 2021. Smartphones will only consume 35% of the wafer. and the majority will go to AMD (27%) and Nvidia (21%). Amid growing demand for game consoles, cloud servers / AI processors, and 5G smartphones, the 7nm process chip will be extremely tight throughout 2021, at the rate of use. average use at 95% – 100%.
|Market share of 7nm Wafer panels by customer in 2021|
High chip inventories become normal in 2021
Although the semiconductor foundry industry is less cyclical than the microchip memory industry, inventory levels are still one of the key factors in predicting growth. At the end of Q3 2020, based on financial reports from major semiconductor founders globally, inventories are about 79 days compared with the industry average of 70 days since 2016. According to Recent reviews from AMD, Nvidia, Qualcomm, or even smaller companies like Dialog Semi (analog IC) show that the outlook for 2021 is generally positive on 5G smartphones, devices. Use for work from home and cloud server. Chip suppliers will maintain high inventories from the fourth quarter of 2020. It is forecasted that inventories in the semiconductor casting industry will reach their highest level by mid-year as foundry customers choose to place orders. earlier wafers to avoid risks in the next half year.
Capital costs on semiconductor foundry will remain high in 2021
Taiwan’s semiconductor maker TSMC is expected to increase its cost of capital up to $ 28 billion this year to maintain its lead in advanced semiconductor technologies. 2021 will be a year of intersection of TSMC’s sales between the two main growth pillars, smartphones and high-performance computing.
Besides, there are signs that Intel will soon enter the CPU outsourcing field for long-term existence. Both TSMC and Samsung are poised to take the opportunity by starting to expand the production capacity of their 5nm / 3nm process chips in 2021. Cost of capital to sales ratio will remain the highest. in 2021 with 40% for TSMC and 70% for Samsung Foundry.
With the strong growth of the semiconductor casting industry in the year 2021, Counterpoint Research expects the global semiconductor casting industry to reach and exceed $ 100 billion in the years 2022-2023.
Phan Van Hoa (according to Counterpointresearch)
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