Author Atkinson | Release Date August 21, 2024 13:20 | Category Semiconductor, Packaging Testing, Wafer

According to a report from market research firm Counterpoint Research, driven by strong demand for AI, the revenue of the global wafer foundry industry in the second quarter of 2024 grew by approximately 9% compared to the previous quarter, and by about 23% compared to the same period last year. In particular, CoWoS supply remains tight, and future capacity expansion will focus on CoWoS-L.

The report notes that while the recovery of non-AI semiconductor demand, such as automotive and industrial, is relatively slow, Counterpoint Research still observes some urgent orders for IoT and consumer electronic products. It is worth noting that the recovery of the wafer foundry and semiconductor market in China is faster than that of global peers. In particular, Chinese wafer foundry companies such as SMIC and Hua Hong performed strongly in the second quarter and have given positive outlooks, as Chinese IC design customers adjusted their inventory earlier than their global counterparts, leading to an earlier rebound.

TSMC's revenue performance in the second quarter of 2024 exceeded expectations, mainly due to the continued growth in demand for AI accelerators. Therefore, TSMC has increased its full-year revenue growth forecast from a low to mid-20% to a mid-20%. Additionally, TSMC expects the supply-demand balance for AI accelerators to remain tight until the end of 2025 or early 2026. To meet the strong growth in customer demand for AI, TSMC plans to at least double its CoWoS capacity in 2025. Counterpoint Research estimates that wafer prices for advanced processes such as 3nm and 5/4nm will increase in 2025, highlighting TSMC's technological leadership and enhancing the company's long-term profitability, driving continued growth in the industry as a whole.

Samsung Foundry's revenue in the second quarter increased compared to the first quarter, mainly due to pre-building and replenishment of smartphone inventory. In the second quarter of 2024, Samsung Foundry maintained a market share of 13%, continuing to rank second globally. Samsung Foundry continues to focus on securing more mobile and AI/HPC customers for advanced processes and expects its full-year revenue growth to exceed the industry average.

In the second quarter, SMIC's performance was strong, with its third-quarter forecast exceeding expectations, mainly due to the continued recovery in demand in the Chinese market for applications such as CIS, PMIC, IoT, TDDI, and LDDIC. The demand for 12-inch wafers at SMIC is improving, and average selling prices (ASP) are expected to rise as Chinese waferless semiconductor customers engage in broader restocking. SMIC maintains a cautiously optimistic attitude towards full-year revenue growth and expects further improvement in capacity utilization in the future.

UMC also reported a strong performance in the second quarter with a healthy profit structure, including favorable exchange rate movements and rigorous price management. UMC expects single-digit sequential revenue growth in the third quarter of 2024, with overall recovery in the logic semiconductor market still weak apart from AI, as observed by Counterpoint Research. UMC is focusing on specialized technologies such as 22nm HV and 55nm RF SOI/BCD, and reducing investments in commodities like LDDIC and NOR Flash, which helps to maintain stable prices and demonstrate long-term growth.

GLOBALFOUNDRIES had a steady performance in the second quarter, driven by wins in new designs, and its automotive business saw growth compared to the previous quarter despite market challenges. The inventory in the smartphone market is gradually stabilizing, and demand in the communication and IoT market is also becoming more stable. The company expects overall business to experience a moderate recovery, consistent with the trend of other non-Chinese mature process wafer foundries such as UMC.

Counterpoint Research analyst Adam Chang stated that in the second quarter of 2024, the global wafer foundry industry showed resilience, mainly driven by strong AI demand and restocking of smartphone inventory. The recovery in the semiconductor industry is uneven, with advanced applications such as AI semiconductors experiencing strong growth, while the recovery of traditional semiconductors is relatively slow. Chinese wafer foundries rebounded quickly due to earlier inventory adjustments and restocking, while the recovery of non-Chinese wafer foundries is slower.

(Picture source：TSMC)