Taiwan Semiconductor Manufacturing Company, Ltd. (TSMC) has risen to fifth place in a ranking of the world’s largest chip companies during the first nine months this year that was compiled by U.S. market research firm IC Insights Inc.
TSMC, the world’s largest supplier of made-to-order chips, rose to fifth from sixth place during the period on the strength of sales that soared by 25 percent, according to the IC Insights report on Nov. 6.
The Taiwan-based chipmaker’s sales growth during the period was outpaced by only two other semiconductor companies on the list, Qualcomm Inc. and Broadcom Corp., both of which are chip designers that use TSMC as a “foundry” to manufacture their chips, IC Insights said. Qualcomm had 27 percent sales growth during the period, and Broadcom, 26 percent.
“More chip production is moving to foundries,” said IC Insights President Bill McClean. “TSMC has done an excellent job of providing leading-edge technology.”
Chipmakers around the globe are counting more on foundries like TSMC and Taiwan-based United Microelectronics Corp. (UMC) to make chips with world-leading technology at an affordable cost. While chips become ever smaller, the price of a chipmaking plant has swelled to as much as US$3 billion, leaving few companies able to bear the high cost of investing in production facilities.
UMC is the world’s second largest chip foundry after TSMC. In the cyclical chip industry, which prospers when the world’s economy is strong and suffers during an economic downturn, foundries spread their investment risk by manufacturing for a wide range of chip companies in businesses ranging from everything such as electronic games, mobile phones and personal computers.
Four companies — namely TSMC, UMC, Chartered Semiconductor Manufacturing of Singapore and Semiconductor Manufacturing International Corporation of China — have an 80 percent share of the world’s chip foundry business, McClean said. TSMC, with 50 percent of the global foundry business, has been gaining market share against some of its smaller rivals, he said.
In the rankings of the top semiconductor companies, TSMC followed Intel Corp. — the world’s largest chipmaker — Samsung Electronics Co., Texas Instruments Inc. and Toshiba Corp.
Of the top five companies on the list, TSMC had the highest growth rate, and two companies had declining sales during the period. TSMC’s sales in the first nine months this year reached US$8.6 billion, just short of fourth-ranked Toshiba, with US$8.7 billion in revenues. Toshiba’s revenues fell by 6 percent during the period, according to IC Insights.
Eight of the top-20 chipmakers had growth rates that more than trebled the 4 percent growth rate in the world semiconductor market during the first nine months this year, IC Insights said.
“There are still strong performers in a slow market,” IC Insights said in the report.
For full year 2008, the top 20 semiconductor suppliers are forecast to have combined sales of $182.2 billion, a 2% increase over 2007, IC Insights said.
Taiwan Semiconductor Manufacturing Company, www.taiwantrade.org.tw
