Global Top 10 Foundries Q4 Revenue Up 7.9%, Annual Total Hits US$111.54 Billion in 2023
March 14, 2024 | TrendForceEstimated reading time: 3 minutes
The latest TrendForce report reveals a notable 7.9% jump in 4Q23 revenue for the world’s top ten semiconductor foundries, reaching $30.49 billion. This growth is primarily driven by sustained demand for smartphone components, such as mid and low-end smartphone APs and peripheral PMICs. The launch season for Apple’s latest devices also significantly contributed, fueling shipments for the A17 chipset and associated peripheral ICs, including OLED DDIs, CIS, and PMICs. TSMC’s premium 3nm process notably enhanced its revenue contribution, pushing its global market share past the 60% threshold this quarter.
TrendForce remarks that 2023 was a challenging year for foundries, marked by high inventory levels across the supply chain, a weak global economy, and a slow recovery in the Chinese market. These factors led to a downward cycle in the industry, with the top ten foundries experiencing a 13.6% annual drop as revenue reached just $111.54 billion. Nevertheless, 2024 promises a brighter outlook, with AI-driven demand expected to boost annual revenue by 12% to $125.24 billion. TSMC, benefiting from steady advanced process orders, is poised to far exceed the industry average in growth.
Top 5 foundries expand market share to 88.8% as TSMC claims over 60% alone
TSMC’s wafer shipments rose in 4Q23 thanks to demand from smartphones, notebooks, and AI-related HPC and its revenue jumped 14% over the quarter to $19.66 billion. Revenue shares from processes 7nm and below climbed from 59% in Q3 to 67% in Q4, underscoring TSMC’s dependency on cutting-edge technologies. With the progressive ramp-up of 3nm production, the share of revenue from advanced processes is expected to surpass 70%.
Samsung also received orders for various new smartphone components, predominantly in mature processes above 28nm. Meanwhile, demand for advanced process main chips and modems saw steadier demand due to early procurement by clients, leading to a slight 1.9% QoQ drop in Samsung’s foundry revenue to $3.62 billion.
GlobalFoundries saw a modest 5% revenue growth in the automotive segment, primarily attributed to a surge in LTAs signed by numerous automotive clients and slight optimizations in ASP. However, shipments in key application areas such as smart mobile devices, communication, and home/industrial IoT witnessed declines, resulting in overall revenue reaching approximately $1.85 billion in Q4. UMC experienced occasional spikes in orders from the smartphone and PC sectors, but a weak global economy, conservative wafer start decisions by clients, and inventory adjustments in the automotive sector led to a downturn in wafer shipments, resulting in a 4.1% decrease in Q4 revenue to about $1.73 billion.
SMIC enjoyed a 3.6% quarterly increase in revenue to roughly $1.68 billion, mainly due to urgent orders related to smartphones and notebooks/PCs, while shipments for network communications, general consumer electronics, and automotive/industrial control sectors saw declines.
PSMC and Nexchip climb in rankings, IFS drops out of top 10
Three significant changes occurred in rankings between the sixth to tenth position: Firstly, PSMC moved up to eighth place, benefiting from the recovery in specialty DRAM wafer outputs and urgent orders for smartphone components. Secondly, Nexchip reentered the top ten and secured the ninth spot, thanks to urgent TDDI orders and high-volume shipments of new CIS products. Thirdly, VIS dropped to tenth place due to a slowdown in TV-related orders and inventory adjustments by automotive and industrial control customers. This decline was most pronounced in revenue from power management platforms—indicating a moderation in demand from European, American, and Japanese IDM clients in the automotive and industrial control sectors.
IFS, which entered the top ten for the first time in 3Q23, was pushed out of the rankings by PSMC and Nexchip due to factors such as the transition between new and old generations of CPUs and lackluster inventory momentum at Intel. Other companies, such as HuaHong Group and Tower, saw their revenue decrease by 14.2% and 1.7%, respectively. The minor decline in revenue for Tower is attributed to its long-term focus on niche markets like RFFEM, automotive, and industrial control, which shielded it from the impacts felt by companies primarily in the consumer electronics sector. However, as automotive and industrial control clients also began adjusting their inventories, the utilization rate of Tower further decreased in the fourth quarter.
Suggested Items
FPT Unveils Strategic Directions, “All In” on AI, Automotive and Semiconductor
04/15/2024 | BUSINESS WIREFPT Corporation (FPT) announced its strategic directions for the 2024-2026 period at the 2024 Annual General Meeting, with five focused areas defined as Artificial Intelligence (AI), Automotive, Semiconductor, Digital Transformation, and Green Transformation.
Electronic System Design Industry Posts $4.4 Billion in Revenue in Q4 2023, ESD Alliance Reports
04/09/2024 | SEMIElectronic System Design (ESD) industry revenue increased 14% to $4,423 million in the fourth quarter of 2023 from the $3,879.9 million logged in the third quarter of 2023, the ESD Alliance, a SEMI Technology Community, announced today in its latest Electronic Design Market Data (EDMD) report.
Sypris Reports Q4 Revenue Up 17%; Backlog Exceeds $115 Million
04/01/2024 | BUSINESS WIREConsolidated revenue for the quarter increased 16.9% and 23.7% for the full year driven by double digit expansion of shipments across both segments.
LPKF Reports Strategic Successes and Narrowly Achieves Forecast for 2023 Financial Year
03/26/2024 | LPKFLPKF Laser & Electronics SE generated revenue of EUR 124.3 million in the financial year (previous year: EUR 123.7 million) and earnings before interest and tax (EBIT) of EUR 3.7 million (previous year: EUR 6.8 million), putting the EBIT margin at 3.0% (previous year: 5.5%).
Jabil Posts Second Quarter Results
03/18/2024 | Jabil“Despite revenue headwinds this year, which are expected to be short-term, I’m pleased with the resiliency of our model and our team’s demonstrated ability to execute,” said CEO Kenny Wilson. “Even under these conditions, we expect to deliver strong core operating margins and free cash flow in FY24,” he added.