Top Semiconductor Foundry Companies to Watch

Semiconductor foundries are factories where chips are made. These chips are in everything from phones to planes. Companies that design chips often don’t make them. Instead, they hire foundries to do it. Taiwan Semiconductor Manufacturing Company (TSMC) is the biggest player in this field. But there are other important companies too. This article looks at the top semiconductor foundries you should know about.

Key Takeaways

• TSMC is the largest semiconductor foundry, holding over 50% of the market share.
• Samsung is another major player known for its advanced technology and large production capacity.
• GlobalFoundries, spun off from AMD, is a significant player in the U.S.
• United Microelectronics and SMIC are other important companies in the industry.
• Intel, Broadcom, Qualcomm, SK Hynix, and Fujitsu Semiconductor are also key players to watch.

Taiwan Semiconductor Manufacturing Company

Taiwan Semiconductor Manufacturing Company (TSMC), founded in 1987, holds a dominant 55% market share in the semiconductor industry. By not designing, manufacturing, or marketing any semiconductor products under its own name, TSMC ensures it never competes with its customers. This strategy has been key to TSMC’s success, focusing on its customers’ success.

TSMC’s client list includes major companies like Apple, Qualcomm, Nvidia, and Advanced Micro Devices. In fiscal 2020, TSMC reported a revenue of $45.5 billion, up from $34.63 billion in 2019. The company also has a well-laid-out future R&D plan, spending around $3.8 billion on R&D, which is equivalent to 8.3% of its revenue.

The company provides the following services: wafer manufacturing, wafer probing, assembly and testing, mask production, and design services.

Samsung

Samsung Electronics Co., Ltd. is a global leader in advanced semiconductor technology. Samsung showcases AI-era vision and latest foundry innovations. The company is renowned for its significant investments in research and development, making it the largest non-U.S. spender in this area. In fiscal 2020, Samsung spent ₩21,229.2 billion (approximately $18.75 billion) on R&D, which was 9% of its sales. This investment led to the company being granted 6,415 patents in the same year, placing it second globally.

Financial Overview

Key Locations

• South Korea: Gyeonggi-do, Yongin; Hwaseong
• China: Tianjin, Xiqing; Shaanxi Province; Suzhou Industrial Park
• United States: Minnesota, Minneapolis; Colorado, Fort Collins; North Carolina, Durham

Samsung’s extensive network of facilities and its commitment to innovation make it a key player in the semiconductor industry.

GlobalFoundries

GlobalFoundries is a key player in the semiconductor industry, holding around 7% of the market share. The company was established in 2009 when Advanced Micro Devices (AMD) decided to spin off its manufacturing arm. This move was backed by investments from Abu Dhabi’s ATIC. In 2012, AMD sold its equity stake, allowing GlobalFoundries to operate independently.

GlobalFoundries has several fabs in the United States, including Fab 8 in New York and Fab 9 in Vermont. These facilities specialize in various technologies such as Bulk CMOS, RF SOI, and SiGe. The company also has a Technology Development Center in New York.

Key Facilities

• Fab 8: Located in Malta, New York, this fab started operations in 2012 and focuses on advanced technologies like High-K Metal Gate and SOI FinFET.
• Fab 9: Situated in Essex Junction, Vermont, this facility has been operational since 1957 and specializes in SiGe and RF SOI technologies.
• Technology Development Center: Based in New York, this center focuses on research and development to drive innovation in semiconductor manufacturing.

Market Position

GlobalFoundries is among the top five semiconductor foundries globally, competing closely with companies like UMC and SMIC. The company’s strategic decisions and investments have positioned it as a significant player in the industry.

United Microelectronics

United Microelectronics Corporation (UMC) is based in Taiwan and has offices around the world, including in the U.S., Europe, China, Japan, Korea, and Singapore. UMC is one of the biggest semiconductor companies in the U.S., with a market capitalization of $20.33 billion as of March 26. The company focuses on providing high-quality IC fabrication services, specializing in logic and various specialty technologies to serve major sectors of the electronics industry.

UMC operates as a semiconductor foundry, offering circuit design, assembly, and testing services for "fabless" design shops that don’t have their own manufacturing capacity. This makes UMC similar to the larger Taiwan Semiconductor.

Financial Highlights

• Dividend yield: 6.8%
• 1-year return: 9.0%
• Consensus rating: Buy (1.50 out of 5)

SMIC

SMIC, or Semiconductor Manufacturing International Corporation, is the largest chipmaker in Mainland China. Headquartered in Shanghai, it stands as the most advanced foundry in the region. The company offers a wide range of integrated circuit (IC) foundry and technology services, with process nodes ranging from 0.35 microns to 14 nanometers.

Despite facing U.S. export controls since 2022, SMIC has continued to grow. In 2020, the company’s revenue increased by 25.4%, reaching $3.9 billion. The revenue from Mainland China and Hong Kong accounted for 63.5% of the total revenue that year.

SMIC has also made significant advancements in technology. In late 2019, they achieved a breakthrough in the 1st generation FinFET technology, entering mass production. This milestone represents the highest level of independent R&D in IC manufacturing technology in Mainland China.

Some of SMIC’s notable customers include Broadcom, Qualcomm, and Texas Instruments. The company holds a market share of 4% in the global semiconductor foundry industry.

Intel

Founded in 1968, Intel has grown into one of the largest semiconductor companies in the world. With over 100,000 employees in 65 countries, Intel produces a wide range of chips, including graphics processing units (GPUs), systems-on-a-chip (SOC), and flash memory. Intel’s line of central processing units (CPUs), under the Intel Core family, are widely used by companies like Dell.

Intel’s offerings include:

• Intel Modular Server System
• Intel Quick Sync Video
• Intel Reader
• Intel system development kit
• Intel Upgrade Service
• Intel740
• InTru3D
• IXP1200
• OFono
• Omni-Path
• Performance acceleration technology
• Shooting Star
• SSDs (X25-M)
• Stable Image Platform Program
• Virtual 8086 mode
• WiDi
• x86

Intel serves various sectors, from hospitality and retail to sports, healthcare, financial services, and transportation. Its product lineup includes Intel Core and Xeon chips, chipsets for mobile, desktop, server, and embedded use, graphics processing units, single- and multi-node servers, server chassis and boards, plus FPGAs and programmable devices.

Intel primarily develops processors for the personal computer (PC) and enterprise server markets. Its Client Computing Group segment supplies PC processors, and its Data Center Group segment serves enterprise customers, including cloud services providers. The remainder consists of internet-of-things (IoT) products for retail, industrial, and healthcare markets; memory and storage products; autonomous driving technology; and programmable semiconductors.

Broadcom

Broadcom, a multinational corporation based in Silicon Valley, primarily operates as a fabless designer with a wide range of semiconductor products. Their portfolio includes Ethernet switch ICs, network adapters, RAID controllers, and other devices used by high-profile customers like IBM, Dell, Motorola, and Nintendo. In 2023, Broadcom finalized a multibillion-dollar deal with Apple to provide 5G radio frequency components.

Broadcom designs, develops, and supplies semiconductor technology and infrastructure software solutions. Their products cover enterprise storage, networking, and communications use cases. The company’s product line includes storage adapters, wireless embedded solutions, RF components, processors, custom silicon devices, and motion control encoders. These products help power large businesses across various industries.

Here are some key details about Broadcom:

• Revenue (2023): $36 billion
• Size: 20,000 employees
• Headquarters: Palo Alto, CA
• U.S. Fabs: Fabless

Broadcom supplies digital and analog semiconductors as well as software for networking, telecom, and data center markets. They provide interfaces for computers’ Bluetooth connectivity, routers, switches, processors, and fiber optics.

Qualcomm

Qualcomm is a global leader in semiconductors and telecommunications, known for designing and marketing wireless communication products and services. Their Snapdragon chipsets are widely used in many mobile devices. Qualcomm’s code division multiple access (CDMA) technology has been crucial in the development of wireless communications worldwide.

Key Financials

Dividend and Stock Performance

• Dividend Yield: 1.9%
• One-Year Return: 82.5%
• Consensus Rating: Buy (1.86 out of 5)

Notable Contributions

• Qualcomm’s Snapdragon 5G platform has significantly impacted mobile and smartphone applications.
• The company collaborates with startups in India through a semiconductor mentorship program to refine their products.

Headquarters

• Location: San Diego, California

SK Hynix

SK Hynix Inc. is a major player in the memory chip industry, based in South Korea. Founded in 1983, the company has grown to become one of the largest suppliers of dynamic random-access memory (DRAM) and flash memory chips. Nearly two-thirds of its revenue comes from DRAM sales, while the remaining one-third is from NAND flash sales.

Financial Overview

• Revenue (TTM): $28.7 billion
• Net income (TTM): -$3.5 billion
• Market cap: $28.7 billion
• One-year trailing total return: 2.15%
• Exchange: Korean Exchange

Global Presence

SK Hynix has a significant global footprint, with facilities in South Korea, China, and other countries. The company is continually expanding its production capabilities, including the construction of a new NAND flash fabrication plant in Cheongju, South Korea.

Key Products

• DRAM Chips: Used in a variety of electronic devices.
• NAND Flash Chips: Essential for data storage in smartphones, tablets, and other gadgets.

SK Hynix remains a company to watch in the semiconductor industry, thanks to its strong market position and ongoing innovations.

Fujitsu Semiconductor

Fujitsu Semiconductor is a key player in the semiconductor industry, known for its innovative technology and extensive manufacturing capabilities. The company has a rich history of developing advanced semiconductor solutions.

Fujitsu operates several manufacturing plants across Japan, including facilities in Kyoto, Nagano, and Toyama prefectures. These plants are equipped to handle various semiconductor processes, such as CMOS, BiCMOS, and bipolar technologies.

Key Facilities

• Kawasaki Plant: Established in 1966, this plant focuses on advanced semiconductor manufacturing.
• Kumagaya Plant: Located in Saitama, this facility has been operational since 1974.
• Suzaka Plant: Another significant site in Japan, contributing to Fujitsu’s production capacity.

Recent Developments

Fujitsu has been actively expanding its production capabilities. In recent years, the company has started operations of new foundry companies to meet the growing demand for semiconductor solutions.

Technology and Innovation

Fujitsu is committed to employing cutting-edge technology in its manufacturing processes. The company utilizes 65nm process technology and 300mm wafers to produce high-quality logic chips.

Global Impact

Fujitsu Semiconductor’s products are used in various applications worldwide, from consumer electronics to automotive systems. The company’s commitment to quality and innovation makes it a significant player in the global semiconductor market.

Conclusion

In conclusion, the semiconductor foundry industry is a critical part of modern technology, powering everything from smartphones to cars. Companies like TSMC, GlobalFoundries, and UMC are leading the way, each playing a significant role in the market. As the demand for advanced technology continues to grow, these foundries will remain essential. Keeping an eye on these top players will be important for anyone interested in the tech world. Their innovations and advancements will shape the future of electronics and beyond.

Frequently Asked Questions

What is a semiconductor foundry?

A semiconductor foundry is a factory where companies make semiconductor chips. These chips are used in many electronic devices like phones, computers, and cars.

Who is the largest semiconductor foundry company?

Taiwan Semiconductor Manufacturing Company (TSMC) is the largest semiconductor foundry company. They make more than half of all the chips in the world.

What does TSMC do?

TSMC makes semiconductor chips for other companies. They don’t design the chips themselves but manufacture them based on other companies’ designs.

Which other companies are big players in the semiconductor foundry market?

Other big players include Samsung, GlobalFoundries, United Microelectronics, SMIC, Intel, Broadcom, Qualcomm, SK Hynix, and Fujitsu Semiconductor.

Why are semiconductor chips important?

Semiconductor chips are important because they are the brains of electronic devices. Without them, devices like phones, computers, and even cars wouldn’t work.

Is Intel a semiconductor foundry?

Yes, Intel is a semiconductor foundry. They are known for making chips for cloud computing, data centers, and personal computers.