Taiwan Semiconductor Manufacturing Co. Ltd. (TSMC) took the top spot in the contract chip manufacturing business again in 2006, and extended its lead over some rivals, such as IBM Corp.

TSMC, which founded the contract chip-manufacturing or foundry industry in 1987, took a 45.2 percent share of the market last year with revenue of US$9.7 billion, according to a preliminary report by Gartner Inc. Chip industry revenue totalled almost US$260 billion last year, with the contract manufacturing segment accounting for nearly a quarter of chip manufacturing revenue, Gartner said.

The Taiwanese chip maker widened its lead against many rivals, including United Microelectronics Corp. (UMC), the world's second largest foundry and also a Taiwanese company, as well as fifth place IBM Corp. UMC's market share dropped below 15 percent, while IBM appears to have dropped below five percent. IBM also manufactures chips that it sells itself, but Gartner did not include their value in this report.

Gartner did not provide specific figures for most of its 2005 and 2006 market share data, but a graph in the report describes general market share increases and declines, and Gartner did highlight the market share of some specific companies, such as TSMC.

The companies posting the strongest growth and market share gains last year were Chartered Semiconductor Manufacturing Ltd. of Singapore and South Korea's Dongbu Electronics Co. Ltd. They both saw revenues grow by a third last year, according to Gartner.

Chartered overtook China's Semiconductor Manufacturing International Corp. to reclaim third place in the foundry industry, a title it lost a few years ago. Dongbu moved up the ranking to the number six spot, from eighth in 2005.

The foundry industry overall grew 16.7 percent last year for industry revenue of US$21.5 billion, Gartner said.

TABLE: Top 10 contract chip makers in 2006

1. Taiwan Semiconductor Manufacturing Co. Ltd.

2. United Microelectronics Corp.

3. Chartered Semiconductor Manufacturing Ltd.

4. Semiconductor Manufacturing International Corp.

5. IBM Corp.

6. Dongbu Electronics Co. Ltd.

7. MagnaChip Semiconductor Ltd.

8. Vanguard International Semiconductor Corp.

9. Shanghai Hua Hong NEC Electronics Co. Ltd.

10. X-FAB Silicon Foundries NV

Source: Gartner Inc.