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To: tech101 who wrote (640)	4/16/2000 10:51:00 PM
From: tech101	Read Replies (1) \| Respond to of 1056

Chip Outsourcing Growth IDC sees foundries doubling share of chip biz to 26% It doesn't take a rocket scientist to figure out where the action is in chip manufacturing these days. Unless you've been on Mars, you already know the silicon foundry business is booming. Now International Data Corp. has put numbers on that growth. Over the next five years, the market researcher expects the foundry business to shoot up a whopping 414%. That means foundry sales will grow from $7 billion this year to $36 billion by 2004 as more integrated device manufacturers (IDMs) opt to outsource their chip making instead of adding fab capacity. The 1996-1998 chip recession weakened many fab-operating IDMs and they are turning to third-party foundries at "an unprecedented rate," IDC says, for capacity as well as leading-edge processes. "This [foundry] growth will reshape the future of semiconductor manufacturing, and strategic outsourcing will become a long-term solution to the cost penalties of in-house fabrication," predicts Mario Morales, IDC chip researcher. IDC estimates that foundries currently produce about 12% of the world's semiconductors, and by 2004 that share will more than double to 26%. Most of that growth will come from the "Big Three" pure-play foundries--Taiwan Semiconductor, United Microelectronics, and Chartered Semiconductor. These three vendors already account for 69% of global foundry volume, and by 2004 their share is expected to grow to 88% of the total foundry business, according to IDC. (See April 14 story). semibiznews.com