Recently, a number of semiconductor investigation agencies have announced their views on the global chip foundry production capacity in 2022 and beyond, which not only talked about the impact of the current epidemic, geographical relations and inflation on wafer production capacity, but also pointed out that countries are in order to avoid these risks. , there is a trend to speed up localized manufacturing. But as far as the chip industry is concerned, localized manufacturing or a full supply chain does not seem to be so easy.
Taiwan's semiconductor share ranks second in the world
In 2021, Taiwan will account for 26% of the market share of semiconductor revenue, ranking second in the world. Its IC design and packaging and testing industries also account for 27% and 20% of the global market share, ranking second and first in the world, respectively. Taiwan is firmly in the lead, accounting for 64% of the foundry market.
Currently, 8-inch and 12-inch foundries are dominated by 24 fabs in Taiwan, followed by China, South Korea and the United States. Looking at new factory plans after 2021, Taiwan remains the region with the largest number of new factories, including 6 new factories under construction, followed by China and the United States, with 4 and 3 new factories planned, respectively.
Due to the advantages and uniqueness of Taiwanese fabs in advanced technology and some special processes, they have accepted the invitation to set up factories in various countries, unlike non-Taiwanese foundries to build fabs locally. Therefore, taking into account the needs of local customers and technical cooperation, Taiwanese manufacturers have successively announced additional factories in mainland China, Japan, Singapore and other places.
However, in addition to TSMC's leading process technology at this stage, UMC, Wanjia, PSMC and other foundries also have their own process advantages. In the past two years, the epidemic and geopolitical turmoil have led to continuous fluctuations in chip supply. Countries have quickly realized that localization of chip manufacturing is necessary. Only in this way can we prevent chip procurement due to logistics difficulties, border transportation bans, and production crossovers. interrupt.
It is estimated that nearly half of the world's production capacity will be in Taiwan this year
Therefore, Taiwanese companies have taken advantage of the trend and become the most sought-after partners of various countries and set up factories in various places. In 2022, Taiwan is expected to account for about 48% of global 12-inch equivalent foundry capacity. Specifically, in terms of 12-inch wafer production capacity with a market share of more than 50%, the market share of advanced processes below 16nm (inclusive) will be as high as 61%. However, as Taiwanese companies expand their production globally, the agency expects that the market share of Taiwan's local foundry capacity will drop slightly to 44% in 2025, of which the market share of 12-inch wafer capacity will drop to 47%, and the advanced manufacturing processing capacity will drop to 47%. About to 58%.
Despite frequent overseas actions, Taiwan's foundries still focus on Taiwan in their recent expansion plans. The integrity of the chip supply chain relies on synergies between upstream (raw materials, equipment and wafers), midstream (IP design services, IC design, manufacturing, and packaging and testing) and downstream (brands and distributors). Taiwan has advantages in talent, geographical convenience, and industrial enclaves. Therefore, Taiwanese foundries still tend to focus on Taiwan for R&D and expansion. This includes TSMC's state-of-the-art N3 and N2 nodes, while companies such as UMC, Vanguard and PSMC retain several new plant projects in Hsinchu, Miaoli and Tainan.
The Taiwanese foundry market share will decline slightly in 2025 as Taiwanese foundries have announced plans to build factories in China, the United States, Japan, and Singapore, and multinational foundries are also actively expanding production. The scattered production capacity of major manufacturers around the world is unlikely to form agglomeration effects in the short term.
Aspects of new wafer production capacity in 2022
The IC industry capacity is expected to increase by 8.7% in 2022, mainly from the 10 new 300mm fabs planned to open this year (less than in 2021). Among them, the largest increase in production capacity is expected to be the large new memory fabs of SK Hynix and Winbond, as well as the three new fabs of TSMC (two in Taiwan and one in mainland China). Other new 300mm fabs include: China Resources Microelectronics' power semiconductor fab; Silan's power discrete and sensor fab; Texas Instruments' RFAB2 facility for analog equipment; ST/Tower's mixed-signal, power, RF and foundry factories; and SMIC's new factory for foundry business.
Despite inflationary pressures, ongoing supply chain issues and other economic difficulties, global demand for IC units remains strong. IC Insights forecasts IC unit shipments to grow 9.2% this year. Even with 10 new fabs coming online, stable demand will support global capacity utilization at a high level of 93.0% in 2022, down slightly from 93.8% in 2021.
