Interested in leading-edge chips at the 22- to 20-nm level? You now have one more reason to toss out that archaic rolodex: your options are now limited to a possible max of four (yes, four (4)) manufacturers.
Here at Smith's MarketWatch, we constantly survey the entire semiconductor supply chain, and as you may recall, we've been writing about the parallels between shrinking architectures and the shrinking number of suppliers for a while now. But to see it in black and white from iSuppli last week here, that our industry is now down to only three or possibly four leading-edge foundries, is still a bit shocking.
Who's on the list? TSMC, STMicro, Samsung, and the possible/likely fourth is Intel. Notice who is missing? Yes, that's right, there are no Japanese foundries listed. Why not? Well, we all saw them drop off the list at the 3x-nm level and there has been no word on this next generation. However, there is noteworthy speculation that there may be (how's that for a hedge?!) some Japanese leapfrogging with a late announcement. If not, then as iSuppli summarizes the situation: "The alternative is far less pleasant, and the Japanese semiconductor industry could suffer greatly if it chooses to remain in the sidelines."
TSMC is by far the leader of this pack of possible four (owning approximately 50% of the market, according to iSuppli data), and reports are pointing to a CAPEX of US$8 billion for 2011, according to DigiTimes on 1/20/11. However, the opportunities for Intel are considerable, as noted in this EETimes review of the iSuppli briefing, "[Intel's possible move into foundry services to design companies and fabless semiconductor suppliers] could lead to significant revenue growth for Intel as well as more favorable asset utilization."
As for Samsung, their stated goal is to be a leader in the global semiconductor supplier market. With their 2010 investments and ongoing CAPEX plans, it is possible that Samsung could meet this goal. However, as iSuppli noted in the same briefing, "Samsung must become more aggressive in both memory manufacturing and in the foundry business."
Meanwhile, there is news of CAPEX cuts from other semiconductor chip manufacturers. DigiTimes reported today (1/25/11) that Nanya and Inotera Memories (DRAM manufacturers) are cutting CAPEX spends for 2011. Nanya is cutting its budget by 48% (from NT$23 billion in 2010 to NT$12 billion for 2011); Inotera has cut its budget by roughly two-thirds (from NT$55 billion in 2010 to NT$17 billion for 2011). These cutbacks are a painful reminder of the DRAM market conditions which are expected to see continued ASP drops at least through 1Q11 (of roughly 6%, according to the same DigiTimes article).
One critical take-away from the latest fab news: as the supplier market continues to shrink at the foundry level, there are serious ramifications for supply, pricing, and innovation as leading-edge chip manufacturing moves towards an oligopoly.