Semiconductor Foundry Market Size :
Semiconductor Foundry Market size is estimated to reach over USD 161.90 Billion by 2031 from a value of USD 88.92 Billion in 2022 and is projected to attain revenue of USD 93.51 Billion in 2023, growing at a CAGR of 7.10% from 2023 to 2031.
Semiconductor Foundry Market Scope & Overview :
Semiconductor foundry (also known as a fab) refers to a factory that is developed for manufacturing silicon wafers. Moreover, it is primarily available in two models including pure-play foundry and integrated device manufacturer (IDM). Additionally, based on the analysis, wafers produced by these systems are used in various industries including automotive, aerospace & defense, healthcare, consumer electronics, telecommunication, and others.
Semiconductor Foundry Market Insights :
Semiconductor Foundry Market Dynamics - (DRO) :
Key Drivers :
Rising integration of semiconductors in automotive sector is driving the semiconductor foundry market growth
Semiconductor is primarily used in the automotive sector for processing and sensing critical data on the vehicle's computing systems to provide reliable, accurate, and timely control over the vehicle. Semiconductors are used in various components of an automobile including switches, microprocessors, sensors, and other related automotive electronic components. Moreover, as per the analysis, the utilization of semiconductors in automobiles offers several benefits including enhanced connectivity, increased safety, advanced driving assistance, and others. The aforementioned benefits of semiconductors are prime determinants for increasing their integration in the automotive sectors.
Factors including the advancements in autonomous driving systems, rising need for enhanced automobile sensor solutions, and increasing production of automobiles are among the key prospects fostering the trend of the automotive sector.
For instance, according to the International Organization of Motor Vehicle Manufacturers, the total automotive production across the world reached 85.01 million in 2022, representing a rise of approximately 6% in comparison to 80.14 million in 2021.
Furthermore, according to the European Automobile Manufacturers Association, the production of passenger cars in the Europe Union reached 10.9 million in 2022, depicting an increase of 8.3% as compared to 2021. Hence, the rising automotive production is increasing the adoption of semiconductors for processing and sensing critical data on the vehicle's computing systems, in turn driving the market trend.
Growing consumer electronics sector is spurring the semiconductor foundry market growth
Semiconductors are used in consumer electronics, particularly for application in laptops, smartphones, games consoles, refrigerators, microwaves and other consumer devices. Semiconductors are capable of controlling and managing the flow of electric current in electronic devices and equipment to ensure smooth operations. Moreover, the benefits of semiconductors including compact size, shock resistance, high sensitivity to temperature and radiation, long shelf-life, and others are further increasing its utilization in the military & defense sector.
Factors including rising penetration of smartphones, laptops, and other consumer devices, increasing demand for smart wearable devices, and growing integration of semiconductors in consumer electronic devices are vital aspects driving the trends of the market.
For instance, according to the Association of German Banks, the electronics industry in Germany attained a significant trend in 2021. The production and nominal sales of electronics sector witnessed a rise of 10% in 2021 as compared to 2020.
Additionally, according to Japan Electronics and Information Technology, the total production by electronics sector in Japan reached USD 95.2 billion in 2021, witnessing a rise of 9.9% in comparison to 2020. Hence, the development of electronics sector is driving the adoption of semiconductors for application in smartphones, laptops, television, and other related devices, in turn proliferating the market trends.
Key Restraints :
Prevalence of stringent standards and regulations associated with manufacturing of semiconductors is restraining the semiconductor foundry market expansion
Semiconductors are used in a wide range of industries including automotive, consumer electronics, healthcare and others. However, semiconductor foundries or manufacturers have to compulsorily comply with various stringent standards associated with the production of semiconductors, which is a prime factor restricting the market expansion.
For instance, semiconductor foundries or manufacturers have to comply with various standards such as ASTM (American Society for Testing and Materials), DIN (German Institute for Standardization), and SEMI (Semiconductor Equipment and Materials International) standards that govern the material use, safety, manufacturing, and communication protocols that must be addressed across semiconductor foundries or fabs. Additionally, based on the analysis, the semiconductor regulation established by the California Air Resources Board aims at reducing greenhouse gas emissions from semiconductor operations in compliance with the California Global Warming Solutions Act.
Therefore, the prevalence of the aforementioned standards and regulations associated with the manufacturing of semiconductors is constraining the trends of the market.
Future Opportunities :
Rising government initiatives for the adoption of electric vehicles is expected to promote potential opportunities for market expansion
The rising government initiatives for manufacturing and adoption of electric vehicles (EVs) are expected to present potential semiconductor foundry market opportunities for the semiconductor foundry market demand. Moreover, semiconductors play a crucial role in electric vehicles for fostering the development of efficient power management systems, powerful batteries, and advanced driver assistance systems. Additionally, as per the analysis, electric vehicles require the integration of more semiconductor content as compared to conventional vehicles for electrification and efficient vehicle operations.
Factors including the advent of electro-mobility, availability of a broad range of models, accessibility to subsidies and tax rebates, and eco-friendliness are driving the adoption of electric vehicles. For instance, tax benefits and purchase incentives for electric vehicles are available in 21 countries listed in the European Union including Austria, Belgium, Netherlands, Poland, Spain, Ireland, and other countries as of 2022.
Furthermore, governments worldwide are framing policies and initiative for reducing pollution and increasing the deployment of electric vehicles, which is anticipated to stimulate the adoption of EVs.
Therefore, rising government initiatives for adoption of electric vehicles are projected to increase the integration of semiconductors in EVs, in turn facilitating opportunities for market demand during the forecast period.
Semiconductor Foundry Market Report Insights :
| Report Attributes | Report Details |
| Study Timeline | 2017-2031 |
| Market Size in 2031 | USD 161.90 Billion |
| CAGR (2023-2031) | 7.10% |
| By Foundry Model | Pure-Play Foundry and Integrated Device Manufacturer (IDM) |
| By End-User | Automotive, Aerospace & Defense, Healthcare, Consumer Electronics, Telecommunication, and Others |
| By Region | North America, Europe, Asia-Pacific, Latin America, and Middle East & Africa |
| Key Players | Taiwan Semiconductor Manufacturing Company Limited, United Microelectronics Corporation, Samsung, Semiconductor Manufacturing International Corporation (SMIC), Globalfoundries Inc., DB HITEK, Intel Corporation, Hua Hong Semiconductor Limited, STMicroelectronics, Tower Semiconductor, X-FAB Silicon Foundries SE, NXP Semiconductors NV, Renesas Electronics Corporation, Microchip Technologies Inc. |
Semiconductor Foundry Market Segmental Analysis :
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.
By Region :
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.
Top Key Players & Market Share Insights:
The global semiconductor foundry market is highly competitive with major players providing semiconductor foundry to the national and international markets. Key players are adopting several strategies in research and development (R&D), product innovation, and application launches to hold a strong position in the semiconductor foundry market. Key players in the semiconductor foundry industry include-
- Taiwan Semiconductor Manufacturing Company Limited
- United Microelectronics Corporation
- X-FAB Silicon Foundries SE
- NXP Semiconductors NV
- Renesas Electronics Corporation
- Microchip Technologies Inc.
- STMicroelectronics
- Tower Semiconductor
- Samsung
- Semiconductor Manufacturing International Corporation (SMIC)
- Globalfoundries Inc.
- DB HITEK
- Intel Corporation
- Hua Hong Semiconductor Limited
Recent Industry Developments :
- In June 2023, Intel Corporation announced an update on its internal foundry model. Moreover, Intel's transition to a new internal foundry model will be a primary factor to enable the company to attain its required cost savings goal of over USD 8 to 10 billion by 2025.
- In June 2022, STMicroelectronic partnered with GlobalFoundries for the development of a new 310mm manufacturing facility in France. The new facility aims at supporting a wide range of technologies for automotive, IoT, industrial, and communication infrastructure applications among others.
Key Questions Answered in the Report
What is semiconductor foundry? +
Semiconductor foundry (also known as a fab) refers to a factory that is developed for manufacturing of silicon wafers.
What specific segmentation details are covered in the semiconductor foundry report, and how is the dominating segment impacting the market growth? +
For instance, by foundry model segment has witnessed pure-play foundry as the dominating segment in the year 2022, owing to the rising demand for semiconductors from automotive, aerospace, and other industrial sectors.
What specific segmentation details are covered in the semiconductor foundry market report, and how is the fastest segment anticipated to impact the market growth? +
For instance, by end-user segment has witnessed automotive as the fastest-growing segment during the forecast period due to the rising adoption of semiconductors in various automobile components including switches, microprocessors, sensors, and other related automotive electronic components.
Which region/country is anticipated to witness the highest CAGR during the forecast period, 2023-2031? +
Asia-Pacific is anticipated to register fastest CAGR growth during the forecast period due to rapid pace of industrialization and growth of multiple industries such as telecommunication, consumer electronics, automotive, and others.
