- TSMC again led the foundry industry with 61% market share.
- Revenue from nodes below 7nm accounted for nearly 70% of TSMC’s total revenue for the quarter.
The global foundry industry experienced a 10% quarter-on-quarter (QoQ) growth in revenue but a 3.5% year-on-year (YoY) decline in Q4 2023. This improvement can be attributed to inventory restocking in the smartphone and PC sectors, despite ongoing macroeconomic uncertainties. Rush orders were seen in both PC and smartphone applications, particularly within the Android smartphone supply chain.
TSMC led the foundry industry in Q4 2023 with a 61% market share, showing an improvement from the 59% growth in Q3 2023. The company’s 5nm capacity utilisation rate reached full capacity due to strong demand for AI GPUs from NVIDIA, while Apple’s iPhone 15 drove growth in the 3nm node. This resulted in revenue from nodes below 7nm accounting for nearly 70% of TSMC’s total revenue for the quarter, highlighting its technological competitiveness.
A Counterpoint report said that AI demand is expected to remain strong in 2024, with increased capacity from TSMC’s wafer level system integration platform, CoWoS (chip-on-wafer, wafer-on-substrate) coming online. TSMC will be the major beneficiary of both the AI mega trend and the logic semiconductor demand recovery.
Samsung Foundry retained its second position with a 14% market share in Q4 2023, benefiting from continued smartphone restocking and the surge in initial pre-orders for the Samsung S24 series, which positively impacted revenue from its 5/4nm technology.
GlobalFoundries and UMC, both mature node foundries, each held a 6% market share in Q4 2023 and delivered better-than-expected results. However, they provided weak Q1 2024 guidance, reflecting poor demand and customer inventory adjustments, particularly in automotive and industrial applications.
SMIC, with a 5% market share in Q4 2023, saw high capacity utilisation rates for its 7/10/14nm nodes, catering to Huawei Kirin chips and China’s local CPU/GPU demand. SMIC expects an increase in rush orders for smartphone-related components like TDDI and CIS in the near term but remains cautious about the full-year outlook due to demand sustainability uncertainties.
The foundry industry, after a sharp downturn in 2023, is expected to return to growth in 2024 as inventory normalises. The main growth drivers for the industry in 2024 will be strong demand for AI and a mild recovery in end demand.
