Pure-play foundry Taiwan Semiconductor Manufacturing Company (TSMC) is expected to see 50% of its 2016 revenues generated from orders placed by its fabless customers based in China and Taiwan, according to industry sources.

TSMC used to have more than 80% of its total revenues generated from orders placed by its non-Greater China customers, but the proportion has declined in recent years, said the sources.

China- and Taiwan-based firms including MediaTek, Spreadtrum Communications and HiSilicon Technologies are expanding their presence in the smartphone-IC market, and have raised wafer starts at their main foundry partner TSMC, the sources indicated. MediaTek, Spreadtrum and HiSilicon are set to ship a combined 600-700 million handset chips in 2016, the sources said.

Meanwhile, with China- and Taiwan-based IC design houses accelerating their push into the Internet of Things (IoT) market, TSMC is seeing 8-inch wafer demand fall short of supply, the sources said.

In addition, the number of China-based IC design firms has already exceeded 400 while that of Taiwan-based fabless companies has reached 200, the sources noted.

TSMC saw sales generated from customers based in North America account for 68% of its total wafer revenues in 2015, while revenues from Asia Pacific, China, EMEA and Japan accounted for 12%, 8%, 7% and 5% of revenues, respectively, according to the company's available presentation materials.