IC Insights released a new report stating that the pure foundry market is expected to grow by 19% this year after a 1% decline in 2019, driven by the increasing demand for sales of application processors and other telecommunications equipment in 5G smartphones.

IC Insights forecasts 200 million 5G smartphone handsets will be shipped in 2020 (although some forecasts expect 250 million units), up from only about 20 million units in 2019.

IC Insights: Pure foundry market is in its fastest growing period since 2014-SemiMedia

The IC Insights report said that if achieved, the 19% increase would mark the strongest growth rate for the pure-play foundry market since the 18% uptick in 2014. Before 2019, the pure-play IC foundry market last declined in 2009 (-9%). As shown in the figure, IC Insights does not expect another pure-play foundry market decline through the forecast period. It is interesting to note that in the past 16 years (2004-2019), the pure-play foundry market grew 9% or less in nine years and by double-digit rates in the other seven years. It appears to have been boom or bust (or at least moderate growth) for the pure-play IC foundry market over the past decade and a half.

IC insights pointed that Pure-play foundries are forecast to represent 81.4% of total foundry sales in 2020, down from 89.3% in 2014. From 2019 through 2024, pure-play foundry sales are forecast to display a compound annual growth rate (CAGR) of an 9.8%, 3.8 points more than the 6.0% CAGR displayed from 2014-2019 and greater than the 7.3% CAGR expected for the total IC market in the same forecast period.