Global revenue for pure-play foundries is expected to jump in Q2 after disastrous performance in Q1 impacted the top 10 foundries, according to a report from iSuppli Corp.

Revenue for foundries is set to rise to $3.6 billion in Q2, up 59.3% from $2.2 billion in Q1, the market research company estimated. The increase follows a 1.8% sequential decrease in Q3 2008, a 32.3% decline in Q4 2008, and a 38.2% decline in Q1.

“The foundry market in the second quarter is benefiting from both a major reduction in semiconductor inventories throughout the electronics supply chain  and innovative new designs requiring innovative technology,” said Len Jelinek, iSuppli's director and principal analyst for semiconductor manufacturing, in a statement Monday. “However, while this growth will come as a relief to the foundries, it will not result in 2009 being a growth year for the foundry industry. Sustainable semiconductor growth will come only when the global economy recovers and consumers return to more normal patterns of purchases.”

ISuppli forecast that for all of 2009, the pure-play foundry market will underperform the overall semiconductor industry, with foundries suffering a revenue decline of 26.5%.
 
According to iSuppli, foundry revenue in Q1 was down 57.7% on a year-over-year basis from $5.3 billion in Q1 2008. That drop hit the foundry market's top 10 performers hard, iSuppli said, noting that nine of the ranked foundries suffered double-digit percentage declines in revenue, both on a sequential and a year-over-year basis.

The researcher pointed out Chartered Semiconductor managed to outperform the overall foundry market by limiting its Q1 year-over-year sales decline to 43.4%. Chartered's market share also increased to 11.3% in Q1, up 2.8 points from 8.5% during the same period in 2008, iSuppli said.

ISuppli also noted that Tower Semiconductor saw Q1 revenue remained flat compared to a year earlier, allowing the company to expand its share by 1.5 points to 2.6%, up from 1.1% in Q1 2008, iSuppli data showed.

“Chartered’s and Tower’s relatively strong performances in the first quarter were due to acquisitions that expanded their revenue, rather than organic growth,” Jelinek said. ISuppli noted that Chartered purchased  an 8-inch manufacturing facility previously operated by Hitachi Semiconductor, while Tower acquired Jazz Semiconductor.

“Although 2009 will continue to be a challenging year for pure-play foundries, those companies that took aggressive actions to strategically prepare for the future in the second half of 2008 will emerge with increased market share and financial strength,” Jelinek said.

By: DocMemory
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