TSMC takes top spot in Q2 supplier ranking

IC Insights says TSMC's final market value ic sales (i.e. the amount paid by end customers for ics made in its fabs), surpassed Intel by a significant margin – which is surprising considering that Intel's ic sales were 45% greater than TSMC's final market value ic sales as recently as Q1 2012. Since TSMC's sales are so heavily weighted toward leading edge devices, IC Insights estimates that the gross margin for TSMC's customer base averages 57%. In general, ic foundries have two main types of customers - fabless ic companies (i.e. Qualcomm, Nvidia, Xilinx, AMD) and IDMs (i.e. Freescale, ST, TI, Fujitsu). The success of the fabless ic segment of the market, as well as the movement to more outsourcing by existing IDMs, has fuelled strong growth in ic foundry sales since 1998. Moreover, an increasing number of mid-size companies are ditching their fabs in favour of the fabless business model. A few examples include IDT, Avago and AMD, which have all become fabless ic suppliers over the past few years. IC Insights believes that the result of these trends will be continued strong growth for the total ic foundry market, which is forecast to increase by 14% this year as compared to only 6% growth expected for the total ic market.