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1

ID: 209096

URL: https://www.techrepublic.com/article/foundries-are-raking-in-big-bucks-and-record-revenue-amid-global-chip-shortage/

Date: 2021-06-01

Foundries are raking in big bucks and record revenue amid global chip shortage

A global chip shortage continues to hamstring companies across industries, resulting in logistical bottlenecks for everything from gaming consoles to cars. On Monday, market research and consulting company, TrendForce, released a report highlighting record-breaking revenue at top foundries and surging prices amid the semiconductor shortages. " Owing to soaring demands for various end devices, manufacturers have been ramping up their component procurement activities, and foundry capacities, as a result, have been in shortage since 2020, with various foundries raising their wafer prices and adjusting their product mixes to ensure profitability," said TrendForce analyst Joanne Chiao in a blog post about the report. In the first quarter of 2021, revenue for the top 10 foundries increased a record of $22.75 billion, representing a 1% quarter-over-quarter rise, according to TrendForce, and these jumps occurred "despite the result for 4Q20 being a high base for revenue comparison and power outage incidents at some fab sites." With 55% of the market share, TSMC topped TrendForce's foundries list with a $12.9 billion in quarterly revenue, representing a 2% quarter-over-quarter rise, according to the report, and TSMC's 7nm and 16/12nm nodes have been the foundry's "main revenue drivers." Due to orders from AMD, MediaTek and Qualcomm, 7nm foundry service revenue has "kept climbing at a stable pace," representing a quarter-over-quarter rise of 23% for the first quarter of 2021, per the report. IT expense reimbursement policy (TechRepublic Premium). TSMC's 16/12nm foundry service revenue has increased as a result of "demand related to" Bitmain "cryptocurrency mining machines" and MediaTek 5G radiofrequency transceivers, the report said, while making note of seasonal production fluctuations with other nodes. "The revenue produced by the 5nm node, which is currently under the market spotlight, underwent a quarterly decrease mainly because Apple as the largest client for the 5nm foundry service entered the off-season for device production," the report said. With a 17% market share, second-ranked Samsung's foundry revenue decreased to $4.11 billion in the first quarter of this year, representing a 2% quarter-over-quarter dip, according to the report. The author made note of winter storms earlier this year and the production challenges related to these meteorological systems. " This February, a freak winter storm in Texas caused power outages in Austin and forced Samsung to temporarily shut down its fab Line S2 that was located in the vicinity. Line S2 finally returned to normal operation at the start of April," the report said. Due to these wafer input suspensions, Samsung became "one of the very few foundries" to post a dip in revenue for the first quarter of 2021, according to the report, and GlobalFoundries' first-quarter revenue dipped to $1.3 billion with a 16% revenue decrease quarter over quarter. " As GlobalFoundries had formally handed over its Fab3E (an 8-inch wafer fab) in Singapore to VIS, Fab3E stopped generating revenue for GlobalFoundries with respect to fulfilling the orders related to last time buy or backlog in 1Q21," the report said, referencing these revenue decreases. Juggling remote work with kids' education is a mammoth task. Here's how employers can help (free PDF) (TechRepublic). With a 7% market said, UMC was able to maintain "a fully loaded capacity" in the first quarter of 2021 due to "robust demand for PMICs, TDDI, OLED DDIs, CIS, and Wi-Fi SoCs." The author of the report described UMC's shipments as "fairly brisk," explaining that the company increased prices "owing to the undersupply situation" and this resulted in the company's revenue increasing 5% quarter over quarter to $1.68 billion in the first quarter. With a 5% market share, SMIC's revenue increased 12% to $1.1 billion in the first quarter of 2021 and the report attributes much of this surge to a "substantial increase in wafer input at the foundry from Qualcomm and MPS," while highlighting a "strong demand" for PMICs using the company's 0.15 and 0.18µm nodes as well as radiofrequency chips, MCUs and WiFi chips constructed using SMIC's 40nm node. " With foundry capacity shortage expected for 2Q21, TrendForce believes the rise in wafer prices will in turn further contribute to revenue growth," the report said. "This is attributed to the fact that, while foundries have not been undertaking significant capacity expansions during 1H21, there has been strong demand for most types of components in 2Q21, meaning foundries will maintain fully loaded capacities going forward." The report said foundry capacity will "further tighten" for non-automotive industries due to some governments "directly" requesting that foundries "prioritize automotive chips in scheduling production." Moreover, the report said TrendForce "expects" a quarter-over-quarter increase of 1% to 3% in the second quarter of 2021 for these top 10 foundries.