IHS: Semiconductor foundries enjoyed strong Q2, but slowdown looms

Revenue for pure-play foundry suppliers reached $7.8billion in Q2, up 16% from $6.7bn in Q1. Revenue of $8.3bn is estimated for Q3, equivalent to a weaker sequential growth of 8%. A seasonal decline of 5% in Q4 is predicted to follow, dropping revenue for the period to $7.9bn. IHS says the strong showing of Q2 this year is atypical. Even though the third quarter is the largest revenue period for the foundry sector, a new pattern of manufacturing is said to have emerged, with initial product shipments from foundry suppliers for new design wins now moving from the third quarter to the second. "This shift in seasonality is related to end suppliers introducing next generation wireless products, like cellphones and tablets, earlier in the year in order to capitalise on sales during a longer period—one lasting three quarters, instead of the usual two quarter time frame that traditionally starts at the beginning of the second half," said Len Jelinek, director and chief analyst of semiconductor manufacturing at IHS. "As a result of the shift in seasonality, foundry suppliers must start to adjust technology development and factory expansion plans to mirror these changes. Shipments in the third quarter are now also a direct reflection of second quarter performance," added Jelinek.