Contract chips, DRam and Flash drive growth

Chip manufacturers in Asia are expanding output faster than in the rest of the world, and will continue to do so, according to new research.

Production capacity will maintain annual growth rates of more than 10 per cent for at least the next four years, researchers from In-Stat have stated.

Asia is home to some of the world's largest chip foundries. The plants make chips for other brands, but do not sell products of their own.

"Pure-play foundries have maintained the lead in developing leading-edge process technologies," said In-Stat research analyst Mayank Jain.

Technologies include the use of 300mm wafers for chip manufacturing. Taiwan has more 300mm chip production lines than any other country, followed by South Korea.
The majority of Taiwan's most advanced production lines are at the country's two contract chip making giants, Taiwan Semiconductor Manufacturing Co and United Microelectronics Corp.

Altogether, the region now has at least 25 operational 300mm chip factories, with more under construction.

Growth in demand for foundry services is driven by an increase in business from integrated device manufacturers that design chips, such as Nvidia, but do not have their own manufacturing facilities.

"The pure play foundries are becoming more important as outsourcing from integrated device manufacturers is on the upswing," said Jain.

The increasing demand for memory chips is also fuelling capacity expansion, according to the analyst. "DRam and Flash manufacturing capacity in the region is also witnessing substantial growth," he said.

Singapore is expected to expand its chip output faster than any other nation in the region as it receives investment from memory manufacturers.