Samsung moves up in foundry ranking

IC Insights has released its 2012 top IC foundries (pure-play and IDM) ranking. Taiwan Semiconductor Manufacturing Company (TSMC) remained the leader while Samsung Electronics surpassed United Microelectronics (UMC) to become the third-largest IC foundry in the world.

Samsung almost doubled its foundry sales in 2012, said IC Insights, adding that the Korea firm will challenge Globalfoundries for the number two spot in the ranking in 2013.

Samsung has the ability (i.e., leading-edge capacity and a huge capital spending budget) and desire to become a major force in the IC foundry business, according to IC Insights. Samsung's dedicated IC foundry capacity is estimated at 150,000 300mm (12-inch) wafers per month in the fourth quarter of 2012. Using an average-revenue-per-wafer figure of US$3,000, Samsung's IC foundry capacity currently has the potential to produce annual sales of about US$5.4 billion.

Top-ranked TSMC's 2012 sales were almost four times that of second-ranked Globalfoundries and more than 10 times the sales of the fifth-ranked foundry Semiconductor Manufacturing International (SMIC), IC Insights indicated.

Meanwhile, only three IDM foundries - Samsung, IBM and MagnaChip - are in IC Insights' 2012 top foundry ranking. Samsung was by far the largest IDM foundry in 2012 with almost 10 times the sales of IBM, the second largest IDM foundry.

In 2012, Samsung was the largest supplier of smartphones in the world by a wide margin, shipping 220 million handsets with Apple coming in second, selling 133 million iPhones, according to IC Insights. Thus, in total, Samsung and Apple represented almost half of the total 750 million smartphones shipped in 2012.

"Samsung is enjoying a tremendous amount of synergy by supplying application processors to the largest (i.e., itself) and second largest (i.e., Apple) suppliers in the world of one of the hottest electronic system products in the world - smartphones," IC Insights pointed out.

After jumping by 82% in 2011, Samsung's foundry sales surged by another 98% in 2012 - making it the fastest growing top-12 foundry in 2011 and 2012, IC Insights said.

Apple's 2012 share of Samsung's total foundry sales was 89%, IC Insights said. Yet, as of early 2013, Apple was still very reliant on Samsung for its advanced IC processor production for its iPad tablets, iPhones handsets, and high-end iPod portable media players.

There is no doubt that Apple is looking to diversify away from being so reliant on its major system level competitor - Samsung - for the production of its advanced ICs. However, IC Insights believes this transition is likely destined to happen over a few years rather than a few quarters.

IC Insights: Top 12 IC foundries, 2011-12
2012 rank	2011 rank	Company	Foundry type	Location	2011 sales	2011/10 change	2012	2012/11 change
1	1	TSMC	Pure-play	Taiwan	14,600	10%	17,167	18%
2	3	Globalfoundries	Pure-play	US	3,480	(1%)	4,560	31%
3	4	Samsung	IDM	Korea	2,190	82%	4,330	98%
4	2	UMC	Pure-play	Taiwan	3,760	(5%)	3,730	(1%)
5	5	SMIC	Pure-play	China	1,320	(15%)	1,682	27%
6	6	Hua Hong Grace*	Pure-play	China	850	36%	940	11%
7	7	TowerJazz	Pure-play	Israel	611	20%	644	5%
8	8	Vanguard	Pure-play	Taiwan	519	2%	582	12%
9	9	Dongbu	Pure-play	Korea	500	5%	540	8%
10	10	IBM	IDM	US	420	(2%)	435	4%
11	11	MagnaChip	IDM	Korea	350	(14%)	400	14%
12	12	WIN**	Pure-play	Taiwan	298	35%	382	28%
Top 12 total					28,898	8%	35,392	22%
Other foundries					3,972	(1%)	3,918	(1%)
Total foundries					32,870	7%	39,310	20%

*Hua Hong NEC and Grace merged in 2012 (incl. Shanghai Huali JV)
**GaAs foundry
Source: IC Insights, compiled by Digitimes, January 2013