IC foundries will continue to see a pull-in of orders for fingerprint-recognition sensor chips to fill their 8-inch fab capacity in 2017, according to industry sources. Meanwhile, longtime market leader Fingerprint Cards (FPC) is facing more competition from China- and Taiwan-based players including Egis Technology (Egistec), Goodix Technology and Silead.

With fingerprint sensor demand set to reach 400 million units in 2017, suppliers intend to diversify their foundry sources for minimizing production risks as well as pursuing lower manufacturing costs in the more competitive market, the sources indicated.

Taiwan Semiconductor Manufacturing Company (TSMC) and Semiconductor Manufacturing International (SMIC) were previously identified as the main foundry partners of fingerprint sensor suppliers. More foundries are being approached due to robust end-market demand, the sources noted.

TSMC's 8-inch fabs have secured orders from FPC, Goodix and Egistec, the sources indicated. SMIC remains FPC's major foundry partner, said the sources, adding that the China-based foundry is also being contracted by Silead to fabricate fingerprint sensors.

FPC used to be the sole fingerprint sensor supplier for Huawei's smartphones. Starting 2016, Silead's and Goodix' fingerprint sensors have been adopted in Huawei's entry-level and mid-range devices, the sources noted. Strong demand from Huawei is giving a boost to Silead's and Goodix' shipments, particularly Silead's.

Silead will start providing fingerprint sensors for Huawei's high-end smartphones in the second half of 2017, the sources said. Silead could then replace FPC as Huawei's largest fingerprint sensor supplier.

Globalfoundries has obtained orders from Silead with shipments already kicking off at the end of 2016, the sources said. Silead's fingerprint sensor shipments continue to expand prompting it to adopt a dual-source strategy.

Despite fewer orders from Huawei, FPC supplies fingerprint sensors for all Oppo's available smartphones and many of Vivo's models, the sources said. Asustek, Lenovo, Xiaomi and ZTE are also among FPC's clients.

Goodix has been partnering with TSMC and Malaysia-based Silterra. Rumors have circulated in the industry that Goodix has placed orders with United Microelectronics' (UMC) Hejian fab due to its strong demand, and approached CSMC Technologies to seek additional capacity.

Egistec used to have only TSMC manufacture its fingerprint sensor products. Egistec has reportedly started to work with Vanguard International Semiconductor (VIS) to satisfy its robust demand in 2017 that will be driven by orders for Samsung's new smartphones.