Foundry Boom Highlights Strategic Chip Technology

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Pulled from EEtimes

October 1, 2020

As semiconductors move front and center in the technology Cold War with China, readers need look no further than recent foundry sales forecasts to see how chip prowess underpins everything from AI to 5G wireless.

Pure-play foundry sales are forecast to jump 19 percent this year after declining 1 percent in 2019 and registering anemic growth over the last several years. The key driver is ten-fold increase in 5G handset shipments, according to IC Insights, which estimates 200 million handsets will be shipped this year. Others are predicting shipments will reach 250 million.

The foundry sales forecast, if realized, would be strongest gain since 2014. Moreover, the market tracker is forecasting uninterrupted growth in pure-play foundry sales through 2024, when global foundry sales are predicted to reach $ 90.9 billion. That total represents a doubling of foundry sales in a single decade.

 

The bullish forecast also reflects the embedding of machine intelligence in nearly every imaginable device, from cars to surveillance cameras. Those sensors are generating torrents of unstructured data, and foundry customers are churning out designs on a monthly basis to move processing horsepower, memory and persistent storage closer to where data is generated.

Pure-play foundries such as Taiwan Semiconductor Manufacturing Co. (TSMC) and GlobalFoundries are the beneficiaries of these digitization and machine learning trends, with the former pushing chip processing nodes to as low as 5 nanometers. Meanwhile, Globalfoundries has redeployed its FinFET process technology at the 12-nm node and above.

It also reports a marked technology “pull” associated with the pandemic, including growing demand for its 22FDX platform based on its FD-SOI process technology. Key applications include 5G mobility and the Internet of Things deployments.

GF said it has so far shipped 350 22FDX chips to global customers. “We’re seeing accelerated demand. It’s not a bubble, it’s an acceleration,” GlobalFoundries CEO Thomas Caulfield said last week.

As TSMC, GlobalFoundries and other pure-play fabs become key assets in the global semiconductor race, their geopolitical influence is growing as the U.S. seeks to block Chinese access to western chip manufacturing technologies. Whether TSMC makes good on its plan to build a fab in Arizona remains unclear — and few observers hold their breath.

Still, ebullient forecast like IC Insights will likely pan out if U.S. policy makers make good on plans to pour billions into chip R&D and revived U.S. chip manufacturing. China’s drive for an indigenous semiconductor industry that would end dependence on U.S. suppliers is driving momentum to revive U.S. foundry capacity.

Some observers question the manufacturing goals of proposed chip R&D legislation, but foundry operators who bristle at the mention of industry “subsidies” say they would welcome public-private partnerships and “co-investment” as a way of meeting the Chinese chip onslaught.

“We’re going to grow our company in a global footprint,” said Caulfield of GlobalFoundries, who emphasized his company has invested more than $15 billion in U.S. foundry capacity.

“With government partnerships in these investments… we will decide how much partnership we can do with the U.S. to first and foremost accelerate our growth, and then decide how we can add to that footprint in the U.S. But we cannot do it without partnerships,” said Caulfield.