Semiconductor foundry market up 16.2% at $34.6 bn in 2012: Gartner

NEW DELHI: Global market for semiconductor foundry rose by 16.2 per cent to USD 34.6 billion last year on account of growing demand for smartphones, among other factors, research firm Gartner said today.

A semiconductor foundry is a business that operates a fabrication plant to manufacture devices like integrated circuits for other companies.

"The increase in the foundry business was attributed to the restocking of inventory by customers, along with the increased demand of smartphones, in which wafers for advanced technology are required," Gartner said in a release.

Foundries performed better than the seasonal norm in the second half of 2012 due to the need of 40 nm (nanometer) wafers as a result of the unexpected fast rise of low-cost smartphones in China and other emerging countries, it added.

The research firm said 2012 has been a significant year for mobile devices globally.

"2012 was the first year that the semiconductor revenue for mobile devices surpassed that of PCs and notebooks," Gartner Vice-President (Research) Samuel Wang, said, adding: "It also marked the first year that advanced technology for mobile applications drove the foundry revenue."

The total worldwide semiconductor revenue reached USD 299.9 billion in 2012, Gartner said.

In 2012, most foundries reported rise in revenue from fabless customers, while the percentage of revenue from integrated device manufacturers (IDM) was flat or even declined, indicating that the chips for mobile devices have been supplied primarily by the fabless companies, it added.

Fabless companies design and sell hardware devices and semiconductor chips while outsourcing the fabrication of the devices to a specialised manufacturer called a semiconductor foundry.