Semiconductor Foundry Market Size (2024 - 2029)

Semiconductor Foundry Market Analysis

The semiconductor foundry market was valued at USD 127.79 billion the previous year and is expected to register a CAGR of 7.67%, reaching USD 184.94 billion by the next five years. Technology inflections such as the Internet of Things (IoT), cloud computing, and artificial intelligence (AI) are driving up the long-term demand for the chip industry. For instance, AI is creating new opportunities for the semiconductor industry as many AI applications rely on hardware as a core enabler of innovation, especially for logic and memory functions. The demand for chips related to the rapidly growing use of AI is expected to contribute significantly to the industry's overall growth.

• Close partnerships between governments across borders, especially in South Korea and the United States, are anticipated to help the growth of the foundry market. Further, governments are encouraging companies to disclose semiconductor production information without revealing trade secrets to identify bottlenecks and prevent supply chain disruptions. The United States government asked firms like Samsung and Taiwan Semiconductor Manufacturing to voluntarily fill out a form detailing such information.
• Advanced analytics, when applied correctly, can drastically enhance operations and margins while simultaneously spurring growth. Despite this, many companies, including several semiconductor companies, have been slow to adopt these strategies.
• Owing to the increasing availability of high-speed connectivity, rising cloud adoption, and increasing use of data processing and analytics, the adoption of the Internet of Things (IoT) is growing steadily. For instance, as per Ericsson, there were 1.9 billion cellular IoT connections in the world in 2022, which is expected to grow to 5.5 billion in 2027, registering a CAGR of 19% over the period.
• Slowing innovation may lead to fewer new users adopting the technology, reducing the money chipmakers have for funding new developments. This may create a self-reinforcing cycle that steadily makes the economics of universal chips less attractive, slowing down technical progress.
• Despite the effects of the COVID-19 pandemic, the global semiconductor market observed robust growth in the latter half of 2020, which continued in 2021 as well. The industry was riddled with a high deficit and increasing demand, leading to a significant supply chain gap primarily attributed to the COVID-19 pandemic. The initial spread of the virus led to the shutting down or the reduction of foundry capacity utilization, fearing the decreasing demand for the chips across major sectors, like automotive. The diminished output led to a global shortage of semiconductors as the demand increased despite the initial estimates by semiconductor foundries.

Semiconductor Foundry Industry Segmentation

A semiconductor foundry, also called a fab and fabrication plant, refers to a factory where devices, like integrated circuits (ICs), are manufactured. Both pure-play foundries (foundries that do not offer products of their own) and IDMs (players that design and produce their own products) are considered a part of the study.

The study tracks the revenue accrued from the semiconductor foundries used across applications. Also, the revenue accrued from the semiconductor foundry vendors has been considered along with the COVID-19 impact on market projection.

The Semiconductor Foundry Market is segmented by Technology Node (10/7/5 nm, 16/14 nm, 20 nm, 28 nm, 45/40 nm, 65 nm, and other technology nodes), by Application (Consumer Electronics and communication, Automotive, Industrial, HPC, and other applications), and by Geography (North America, Europe, Middle East & Africa, and Asia Pacific). The market sizes and forecasts are provided in terms of value (USD) for all the above segments.