Semiconductor Foundry Market - Size, Industry Share, Growth Trends and Forecasts (2023 - 2031)

By Foundry Model :

Based on the foundry model, the market is bifurcated into pure-play foundry and integrated device manufacturer (IDM). The pure-play foundry segment accounted for the largest revenue share in the year 2022. Pure-play semiconductor foundry refers to a company that operates semiconductor fabrication plants focused on producing integrated circuits (ICs) for other companies instead of offering IC products of its own design.

For instance, in August 2023, Taiwan Semiconductor Manufacturing Company Limited, a pure play semiconductor foundry, established a joint venture with Infineon Technologies AG, Robert Bosch GmbH, and NXP Semiconductors N.V. with the aim of investing in European Semiconductor Manufacturing Company (ESMC) GmbH in Germany. ESMC marks a crucial step towards construction of a 310mm fab for supporting the future capacity needs of the fast-growing automotive and industrial sectors. Therefore, as per the analysis, the rising developments associated with pure play semiconductor foundry is among the key factors driving the demand of the market.

The integrated device manufacturer (IDM) segment is anticipated to register the fastest CAGR during the forecast period. An integrated device manufacturer (IDM) refers to a semiconductor company that designs, manufactures, and sells IC products. Moreover, IDMs are responsible for managing all processes involved in semiconductor manufacturing from planning and production to sales of final products.

For instance, in March 2021, Intel Corporation announced the IDM 2.0 strategy, which is considered to be a primary progression of Intel's integrated device manufacturing (IDM) model. Intel further announced semiconductor manufacturing expansion plans, with an approximate investment of USD 20 billion for building two new factories in Arizona, United States. Hence, the rising advancements related to integrated device manufacturers is anticipated to drive the market demand during the forecast period.

By End-User :

Based on the end-user, the market is segregated into automotive, aerospace & defense, healthcare, consumer electronics, telecommunication, and others. The consumer electronics segment accounted for the largest semiconductor foundry market share of 31.3% in the year 2022. Factors including progressions in consumer electronics including artificial intelligence (AI) and internet of things (IoT), increasing penetration of smartphones, tablets, and other consumer devices, and rising popularity of smart wearable devices are driving the demand of the consumer electronics segment.

For instance, according to GSM Association, the adoption of smartphones in Germany is projected to reach 84% by 2025, witnessing an increase from 80% in 2021. Additionally, according to the Brazilian Electrical and Electronics Industry Association (ABINEE), the electrical and electronics sector in Brazil was valued at USD 42.2 billion in 2022, witnessing a rise of nearly 8% in comparison to USD 39.2 billion in 2021. Therefore, based on the analysis, the expansion of consumer electronics sector is driving the adoption of semiconductors for application in smartphones, laptops, tablets, and other related devices, in turn proliferating the trends of the market.

Automotive segment is expected to witness fastest CAGR during the forecast period. The expansion of automotive segment is attributed to several factors including growing investments in expansion of automotive manufacturing facilities, increasing production of automobiles, rising integration of advanced driver assistance system in modern automobiles, and advancements in autonomous driving systems.

For instance, according to the China Association of Automobile Manufacturers, the total production of passenger cars in China reached up to 14.8 million units in January-August 2022, witnessing a YoY growth of 14.7%. Semiconductors are used in various components of an automobile including switches, microprocessors, sensors, and other related automotive electronic components. Thus, rising automotive production is anticipated to drive the adoption of semiconductors, in turn fostering market expansiion during the forecast period.

Semiconductor Foundry Market Regional Analysis :

The regional segment includes North America, Europe, Asia Pacific, Middle East and Africa, and Latin America.

North America accounted for the largest revenue share of USD 33.12 Billion in 2022 and is expected to reach USD 60.31 Billion by 2031, registering a CAGR of 7.1% during the forecast period. In addition, in the region, the U.S. accounted for the maximum revenue share of 75.25% in the same year. The semiconductor foundry market trend in the North American region is primarily driven by the increasing adoption of semiconductors in automotive, aerospace & defense, healthcare, and other sectors. Additionally, as per the semiconductor foundry market analysis, North America has been a primary hub for companies associated with autonomous vehicle manufacturing. The advent of autonomous driving and the rising adoption of semiconductors in various automotive electronic components has been significant factors for market expansion in the region.

For instance, according to the International Organization of Motor Vehicle Manufacturers, the overall automotive production in North America reached 14,798,146 units in 2022, witnessing a rise of 10% from 13,467,065 units in 2021. Hence, the growing automotive sector is propelling the adoption of semiconductors, in turn fostering market expansion in the North American region. Additionally, factors including rising investments in electric vehicles and telecommunication sectors are anticipated to foster lucrative opportunities for market expansion in North America during the forecast period.

Asia-Pacific is expected to register the fastest CAGR growth of 7.3% during the forecast period. The growing pace of industrialization and development is creating lucrative growth prospects for the market in the region. Additionally, factors including the growth of multiple industries such as telecommunication, consumer electronics, automotive, and others are fostering the market growth for semiconductor foundry in the Asia-Pacific region.

For instance, according to the India Brand Equity Foundation, the consumer electronics sector in India was valued at USD 9.84 billion in 2021, and it is projected to grow at a considerable rate to reach USD 21.18 billion by 2025. Hence, the growing consumer electronics sector is anticipated to drive the utilization of semiconductors for deployment in smartphones, laptops, tablets, and consumer appliances, thereby, proliferating the market growth in the Asia-Pacific region during the forecast period.