Global foundry market saw highest growth in a decade

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The analyst firm TrendForce has said that it expects the global foundry market’s revenue to reach $84.6 billion this year, a 23.7% year-over-year growth, the highest it has seen in the past decade. This growth took place as a result of aggressive inventory procurement by OEMs due to COVID-19 and the boom in working from home.

TrendForce is predicting the market to reach new highs next year with close to 6% year-over-year growth as capacities remain scarce but demand remains. Next year, three things are expected to contribute to foundry demand: the stay-at-home economy is expected to continue while vaccines roll out, the China-U.S. trade war isn’t expected to be resolved and the global economy is due to begin its recovery.

Demand for components is expected to rise next year, the firm said. The demand will come due to next-gen networks such as 5G and WiFi 6 but also products such as smartphones, servers, notebooks, TVs and automobiles are expected to see growth of between 2% and 9%. Depending on how things go with the coronavirus, though, we could see a correction in the demand for end-user products.

Still more than six months away, TrendForce says we could see a correction in the demand for end-user products in 2H21 as COVID-19 vaccines are used on more and more of the world’s population and people begin to return to their offices. In turn, this could see OEMs adjust their inventories, lightening the load of foundries. With that said, 5G smartphones are expected to become more widespread and new network infrastructure like 5G and WiFi 6 networks will be set up in more areas boosting demand for foundry output, which could bolster growth.

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