Global revenue in the chip foundry market is expected to post a sequential rise in the second quarter after three quarters of declines, but 2009 will remain challenging for foundries, market search firm iSuppli said.

Global revenue for foundries, or contract chipmakers, including sector leaders TSMC, UMC and Chartered Semiconductor, was set to rise to $3.6 billion in the second quarter, iSuppli Corp said in a statement seen by Reuters on Tuesday.

That would be an increase of about 60 percent from the first quarter's $2.25 billion, iSuppli said.

The foundry market in the second quarter is benefiting from both a major reduction in semiconductor inventories throughout the electronics supply chain and innovative new designs requiring innovative technology, said Len Jelinek, director and principal analyst, semiconductor manufacturing, for iSuppli.

TSMC and UMC, which iSuppli said took a combined 63 percent share of the foundry market in the first quarter, have forecast a bright second quarter, partly on strong demand from China, as a result of stimulus spending on the mainland.

However, while this growth will come as a relief to the foundries, it will not result in 2009 being a growth year for the foundry industry, Jelinek said.

Sustainable semiconductor growth will come only when the global economy recovers and consumers return to more normal patterns of purchases.

For 2009, the pure-play foundry market would underperform the overall semiconductor industry, suffering a revenue decline of 26.5 percent, iSuppli said.

(Reporting by Baker Li, Editing by Chris Lewis)

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