The TrendForce report reveals a 7.9% increase in revenue for top ten semiconductor foundries in Q4 2023, reaching $30.49 billion, driven by sustained smartphone component demand and the launch of Apple's A17 chipset. Despite challenges like high inventory and a slow Chinese market recovery, the industry is expected to see a 12% revenue boost in 2024 due to increasing AI applications demand.
- 7.9% increase in revenue for top ten semiconductor foundries in Q4 of 2023
- TSMC's premium 3 nm process significantly enhancing its revenue contribution and pushing its global market share beyond 60%
- Predicted 12% boost in annual revenue for 2024, driven by increasing demand for AI-driven applications
In the ever-evolving world of semiconductors, the latest TrendForce report has shed light on some interesting developments. The report reveals a significant 7.9% increase in revenue for the top ten semiconductor foundries in the fourth quarter of 2023, reaching a staggering $30.49 billion. This growth can be attributed to the sustained demand for smartphone components, particularly mid and low-end smartphone application processors (APs) and peripheral power management integrated circuits (PMICs).
The launch of Apple’s latest devices also played a significant role in driving this growth. The shipments for Apple’s A17 chipset and associated peripheral integrated circuits (ICs), including organic light-emitting diode display drivers (DDIs), complementary metal-oxide-semiconductor image sensors (CIS), and PMICs, were fueled by the launch season of their latest devices.
One notable player in this growth is TSMC (Taiwan Semiconductor Manufacturing Company). With its premium 3 nm process, TSMC has significantly enhanced its revenue contribution, pushing its global market share beyond the 60% mark this quarter. This achievement highlights TSMC’s expertise in advanced semiconductor manufacturing.
However, it’s important to note that 2023 was not without its challenges for the Foundry industry. High inventory levels across the supply chain, a weak global economy, and a slow recovery in the Chinese market created a downward cycle for the industry. As a result, the top ten foundries experienced a 13.6% annual drop in revenue, reaching just $111.54 billion.
Despite these challenges, there is hope on the horizon. The report predicts a brighter outlook for 2024, with an expected 12% boost in annual revenue to reach $125.24 billion. This growth will be driven by the increasing demand for artificial intelligence (AI)-driven applications.
Within this landscape, TSMC is poised to outperform the industry average in terms of growth. Thanks to steady advanced process orders, TSMC’s wafer shipments rose in the fourth quarter of 2023. Its revenue jumped by 14% to reach an impressive $19.66 billion. Moreover, TSMC’s revenue shares from processes 7 nm and below climbed from 59% in the third quarter to 67% in the fourth quarter, highlighting the company’s reliance on technologies. With the progressive ramp-up of its 3 nm production, TSMC is expected to see its revenue share from advanced processes surpass 70%.
Samsung, another key player in the semiconductor foundry market, also received orders for various new smartphone components. However, these orders were predominantly for mature processes above 28 nm. On the other hand, demand for advanced process main chips and modems remained steady due to early procurement by clients. As a result, Samsung’s foundry revenue experienced a slight 1.9% quarter-on-quarter drop to $3.62 billion.
GlobalFoundries, with a focus on the automotive segment, saw a modest 5% revenue growth. This growth was primarily attributed to a surge in long-term agreements signed by numerous automotive clients and slight optimizations in average selling prices (ASPs). However, declines in key application areas such as smart mobile devices, communication, and home/industrial Internet of Things (IoT) resulted in an overall revenue of approximately $1.85 billion in the fourth quarter.
UMC (United Microelectronics Corporation) experienced occasional spikes in orders from the smartphone and PC sectors. However, a weak global economy, conservative wafer start decisions by clients, and inventory adjustments in the automotive sector led to a downturn in wafer shipments. As a result, UMC’s fourth-quarter revenue decreased by 4.1% to approximately $1.73 billion.
SMIC (Semiconductor Manufacturing International Corporation) enjoyed a 3.6% quarterly increase in revenue to roughly $1.68 billion. This growth can be attributed to urgent orders related to smartphones and notebooks/PCs. However, shipments for network communications, general consumer electronics, and automotive/industrial control sectors saw declines.
In terms of rankings, there were three significant changes between the sixth and tenth positions. PSMC moved up to the eighth spot, benefiting from the recovery in specialty dynamic random-access memory (DRAM) wafer outputs and urgent orders for smartphone components. Nexchip reentered the top ten, securing the ninth position, thanks to urgent touch and display driver integration (TDDI) orders and high-volume shipments of new complementary metal-oxide-semiconductor image sensor (CIS) products. On the other hand, VIS dropped to tenth place due to a slowdown in TV-related orders and inventory adjustments by automotive and industrial control customers.
IFS (Intelligent Flying Systems), which entered the top ten for the first time in the third quarter of 2023, was pushed out of the rankings by PSMC and Nexchip. This was primarily due to factors such as the transition between new and old generations of central processing units (CPUs) and lackluster inventory momentum at Intel.
Overall, the semiconductor foundry industry faced challenges in 2023 but is expected to rebound in 2024. With increasing demand for AI-driven applications and advancements in advanced process technologies, key players like TSMC are well-positioned for growth.
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Background Information
About Apple:
Apple Inc., known for its iconic products, was founded by Steve Jobs, Steve Wozniak, and Ronald Wayne in 1976. The company has since revolutionized the technology landscape with innovations like the Macintosh computer, iPod, iPhone, iPad, and more. for its emphasis on design, user experience, and ecosystem integration, Apple's devices and software have made a profound impact on various industries. With a commitment to quality and innovation, Apple remains a global technology leader.Latest Articles about Apple
About Intel:
Intel Corporation, a global technology leader, is for its semiconductor innovations that power computing and communication devices worldwide. As a pioneer in microprocessor technology, Intel has left an indelible mark on the evolution of computing with its processors that drive everything from PCs to data centers and beyond. With a history of advancements, Intel's relentless pursuit of innovation continues to shape the digital landscape, offering solutions that empower businesses and individuals to achieve new levels of productivity and connectivity.Latest Articles about Intel
About Samsung:
Samsung, a South Korean multinational conglomerate, has established itself as a global leader in various industries, including electronics, technology, and more. Founded in 1938, Samsung's influence spans from smartphones and consumer electronics to semiconductors and home appliances. With a commitment to innovation, Samsung has contributed products like the Galaxy series of smartphones, QLED TVs, and SSDs that have revolutionized the way we live and work.Latest Articles about Samsung
About TSMC:
TSMC, or Taiwan Semiconductor Manufacturing Company, is a semiconductor foundry based in Taiwan. Established in 1987, TSMC is a important player in the global semiconductor industry, specializing in the manufacturing of semiconductor wafers for a wide range of clients, including technology companies and chip designers. The company is known for its semiconductor fabrication processes and plays a critical role in advancing semiconductor technology worldwide.Latest Articles about TSMC
Technology Explained
Foundry: A foundry is a dedicated manufacturing facility focused on producing semiconductor components like integrated circuits (ICs) for external clients. These foundries are pivotal in the semiconductor industry, providing diverse manufacturing processes and technologies to create chips based on designs from fabless semiconductor firms or other customers. This setup empowers companies to concentrate on innovative design without needing substantial investments in manufacturing infrastructure. Some well-known foundries include TSMC (Taiwan Semiconductor Manufacturing Company), Samsung Foundry, GlobalFoundries, and UMC (United Microelectronics Corporation).
Latest Articles about Foundry
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