This market research report was originally published at the Yole Group’s website. It is reprinted here with the permission of the Yole Group.
While the semiconductor foundry industry is facing many challenges, it is on track to have a 5.4% CAGR until 2029.
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Semiconductor device industry is growing at a 5.4% CAGR , mainly powered by Server, Automotive, and Industrial demand.
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Technological innovations are fueling this growth in the semiconductor industry.
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The semiconductor foundry industry is navigating a complex landscape of make-or-buy decisions and international dependencies.
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In 2024, the growth in semiconductor foundry capacity outpaced revenue growth, raising fears of overcapacity, especially from legacy node players in mainland China.
The semiconductor foundry industry faces a complex landscape of make-or-buy decisions and international dependencies, announces Yole Group in its new technology & market analysis, Overview of the Semiconductor Foundry Industry 2024.
IDMs produce semiconductors both locally and abroad, while fabless companies rely heavily on overseas foundries. This reliance is especially significant in the US and Europe, where excess demand requires substantial overseas capacity, predominantly provided by Asian countries.
“Critical suppliers, including Taiwan, South Korea, Japan, Singapore, and Malaysia, collectively shape the global supply chain. The intricate, interdependent nature of this supply chain has proven vulnerable to disruptions, leading to significant efforts from governments and corporations worldwide to mitigate these risks and enhance resilience”.
Pierre Cambou
Principal Analyst for Global Semiconductors, Yole Group
In this context, the Overview of the Semiconductor Foundry Industry 2024 report by Yole Group provides insights into the semiconductor foundry market, offering market forecasts and value chain and supply-demand analysis. Additionally, the report gives an overview of the semiconductor foundry technology trends and provides a complete analysis of all significant semiconductor foundry players.
The semiconductor industry has been grappling with substantial challenges since the US initiated a trade war in 2019, further exacerbated by potential conflicts between China and Taiwan. This geopolitical tension, compounded by the COVID-19 pandemic, has driven an accelerated substitution program by Chinese companies and prompted sustained global efforts to secure supply chains. Government subsidies and initiatives such as the various “Chip Acts” are critical responses to these disruptions, aiming to enhance domestic production capabilities and reduce dependency on foreign suppliers. The industry must navigate these geopolitical complexities while simultaneously addressing the increasing carbon footprint of the ICT sector, which relies heavily on semiconductor technology.
Technological advancements and market shifts are driving strong growth in the semiconductor industry, with an anticipated CAGR23-29 of 6.4%. This growth is fueled by rising demand from the server, automotive, and industrial sectors. Leading companies like TSMC, Samsung, and Intel are focusing on advanced node manufacturing, investing heavily in next-generation processes like 2nm, and future technologies such as 18Å and 14Å.
“The open-foundry model is gaining momentum, expected to capture 69% of the market by 2029. However, the challenge of reducing physical feature sizes requires ongoing innovation and strategic investments. The high costs associated with advanced nodes are driving the adoption of new techniques, such as High NA EUV .”
Pierre Cambou
Principal Analyst for Global Semiconductors, Yole Group
Alongside these efforts, the industry must continue to navigate these geopolitical and technological complexities while addressing the growing carbon footprint of the ICT sector, which is ultimately powered by semiconductor technology.
Acronyms
- CAGR : Compound Annual Growth Rate
- IDM : Integrated Device Manufacturers
- ICT : Information and Telecommunication Technologies
- NA : Numerical Aperture
- EUV : Extreme Ultraviolet
- CBA : CMOS Bond Array
- SoC : System-on-Chip
- Si : Silicon
- TSV : Though-Silicon Via
- TMV : Through-Mold Via
Yole Group has been extensively covering the global semiconductor industry for some time now. From materials to equipment, encompassing devices and modules, our company diligently investigates the markets to gain in-depth insights into innovations and their industry impact. Our analysts actively participate in over 100 conferences annually to exchange perspectives, discuss the latest developments, and address challenges.
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