Expanded global dominance for TSMC in the foundry market

In the second quarter of 2021, the global foundry market saw significant shifts, with Taiwan Semiconductor Manufacturing Company (TSMC) securing a record 70.2% share, a notable increase from the previous quarter's 69.9%. This expansion came at the expense of Semiconductor Manufacturing International Corporation (SMIC), whose market share dropped to 5.1% from 6.0%.

TSMC's impressive sales for Q2 2021 amounted to US$30.24 billion, marking a 18.5% increase from the previous quarter. The growth was driven by major smartphone customers entering their ramp-up cycle and robust demand for artificial intelligence (AI) chips, laptops, and personal computers (PCs).

Samsung Electronics Co, the second-largest player in the global foundry market, saw its market share dip to 7.3% in Q2 2021, down from 7.7% in the previous quarter. Despite this decline, Samsung's sales grew by 9.2% sequentially, reaching US$3.16 billion. The demand for smartphones and the ramp-up of Nintendo Co's Switch 2 game consoles contributed to Samsung's growth.

The combined sales of the top 10 foundry companies increased by 14.6% sequentially to US$41.72 billion in Q2 2021. GlobalFoundries Inc held fifth place with sales of US$1.69 billion and a market share of 3.9%. United Microelectronics Corp (聯電) followed closely behind with US$1.9 billion in sales and a 4.4% market share.

The growth in sales and capacity utilization is expected to be supported by seasonal demand for new products and steady orders for advanced and mature-node chips. For this quarter, the industry's capacity utilization and sales are anticipated to show moderate growth.

It's worth noting that the gap between TSMC and Samsung in the global foundry business widened to 62.9 percentage points in Q2 2021 from 59.9 percentage points in the previous quarter. The gap between SMIC and Samsung also widened to 2.2 percentage points last quarter.

TrendForce Corp (集邦科技) reported on the performance of TSMC and Samsung Electronics Co in the global foundry business in Q2 2021. They noted that TSMC's wafer shipments and average selling prices were boosted in Q2 2021.

Looking ahead, the growth in the combined sales of the top 10 foundry companies was attributed to Chinese consumer subsidies and demand for new smartphones, laptops, PCs, and servers set to launch in the second half of the year. The industry is expected to continue its upward trend, with TSMC maintaining its dominant position in the global foundry market.

Meanwhile, SMIC's market share in the global foundry business fell to 5.1% in Q2 2021 from 6.0% in the previous quarter, marking a slight decline for the company. SMIC's sales decreased by 1.7% to US$2.21 billion in Q2 2021.

In summary, the second quarter of 2021 saw TSMC solidify its dominance in the global foundry market, while SMIC experienced a slight setback. The demand for advanced semiconductors, particularly for AI chips, smartphones, laptops, and PCs, continues to drive growth in the industry, with the top 10 foundry companies expected to maintain their upward trajectory.