Following the insufficient production capacity issue in 2021, wafer foundries around the world have operated at full load or overload while gearing up their capacity expansion plans to tap the increasing market demand. Most of wafer foundries in 2021 claimed to open new fabs between 2023 and 2024. However, the shortage situation, as far as 2022 is concerned, appears to remain the same, according to Taiwan's government-backed IT research institute MIC (Market Intelligence & Consulting Institute). Meanwhile, as China aims to achieve the target of domestically manufacturing 70% of its semiconductors under the "Made in China 2025" strategy, foundries in China have been actively expanding their production capacity over the years. Led by SMIC, major foundries in China have all set to increase their production capacity by more than 20% by the end of 2023 compared to the end of 2021. Although the increase in production capacity may help address strong domestic demand in China, it may also turn into an oversupply crisis in the semiconductor industry after 2023.

New Capacity Expansion Plans of Leading Foundry in China, 2022~2023

Note: Production capacity of individual foundries was calculated based on 8" wafer, for comparative purpose, for instance, a 12-inch wafer is converted into 2.25 8" wafers

Source: Respective companies, compiled by MIC, August 2022

Following a downward revision in shipment value, global semiconductor shipment value is estimated to reach approximately US$600 billion in 2022 and witness single digit year-on-year growth. Meanwhile, MIC predicts that shipment value of the Taiwanese semiconductor industry will maintain over NT$4 trillion (US$135.1 billion; US$1 = NT$29.6) and enjoy an approximately 15% year-on-year growth, higher than the global average. Established in 1987, MIC (Market Intelligence & Consulting Institute) is a division of III (Institute for Information Industry), a major government think tank, and one of the leading IT research institutes in Taiwan.

To know more about this topic, please visit: 
Development of the Global Semiconductor Foundry Industry, 2021-2022 (pre-order),
Global Semiconductor Industry Trends and Foundry Capacity Deployment 

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