The Big Four foundries: how they look after 2Q09

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As the Big Four pure-play foundries have now published their results for the second quarter of 2009 and their numbers have recovered substantially, now seems a good time to look at what's happened over the past couple of years. Rather than look at their overall sales, I've focused on the main process technologies that they are now running.

The four charts above are all sized so that you can compare how the foundries are doing on what are the most important processes for them. The ones that are missing are the older 0.25µm and larger geometries. However, compared with the total sales of foundries, these are fairly small beer.

SMIC does not yet have 65nm running in volume, although it is working on introducing a 45nm process licensed from IBM. But TSMC, UMC and Chartered now have had 65nm running for some time. I haven't included 45nm as TSMC only shipped $20m worth of wafers last quarter and no-one else has their process running yet. What's interesting about these graphs is the way that the processes each do about $1bn a quarter. Bear in mind this is revenue for each process rather than numbers of wafers, so the Big Four will be shipping way more 200mm-equivalent wafers of 180nm than they will of 65nm.

Although the share will get bigger as integrated device manufacturers (IDMs) look more closely at their operations, there is a glass ceiling on how much the foundries can make from a given process. Beyond that, it becomes worth customers operating their own fabs and taking the margin they would otherwise pay to foundries. This is why TSMC is arguably going to do better at taking processes over from small, relatively uneconomic fabs than trying to take business from IDMs with larger 200mm fabs. However, there are more players able to supply parts based on older processes, which will help depress wafer prices.

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The second pair of graphs look at wafers shipped per quarter in 200mm-equivalents together with revenue per wafer shipped. Although wafer numbers have recovered, pricing has taken a hammering, particularly for TSMC. This does not seem to be down to a change in mix, at least not significantly. However, Chartered seems to have done rather better in relative terms than the others, largely due to its ability to bring on a reasonable amount of 65nm capacity, although nothing like the quantity that TSMC has.

The Common Platform deal seems to be working out well for the foundry, although it has encountered problems actually making money over the long-term. With 45nm in development and 32nm around the corner, Chartered could benefit from TSMC's hiccup on 40nm yields. And it's double bad news for UMC which, although it has had 65nm running in production since mid-2007, missed out on the lead that TSMC and then Chartered managed to establish.