Foundry market set to recover

"The foundry market in the second quarter is benefitting from both a major reduction in semiconductor inventories throughout the electronics supply chain and innovative new designs requiring innovative technology," said, iSuppli director Len Jelinek, the company's principal analyst for semiconductor manufacturing. "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." According to Jelinek, the foundry market's 'disastrous' performance in Q1 was reflected in the weak results of the Top 10 players, nine of which saw double digit percentage declines in revenue on a sequential and on a year on year basis. Chartered Semi outperformed the foundry market, says iSuppli, by limiting its year on year sales decline to 43.4% Market leader TSMC, meanwhile, saw its revenues drop by 60% on a year on year basis. Nevertheless, it still retains 49% of global foundry business. "Although 2009 will continue to be a challenging year for pure-play foundries," Jelinek concluded, "those companies that took aggressive actions in the second half of 2008 to prepare for the future will emerge with increased market share and financial strength."