TrendForce: Advanced processes continue to strengthen, and Chinese policies drive global top 10 foundry output to a new high in Q3 2024.

According to the latest research by TrendForce, although the overall economic situation did not significantly improve in Q3 2024, factors such as supply chain restocking driven by new smartphone and PC/notebook launches in the second half of the year, coupled with continued strong demand for AI server-related HPC applications, led to an improvement in overall foundry utilization rates compared to Q2. The total revenue of the world's top 10 foundries increased by 9.1% quarter-on-quarter to $34.9 billion in Q3, with a portion of this growth attributed to significant contributions from high-priced 3nm production, breaking the historical record set during the pandemic.

Looking ahead to Q4 2024, TrendForce predicts that advanced process nodes will continue to drive revenue growth for the top 10 foundries, though the quarter-on-quarter growth rate will slightly moderate. Operational performance is expected to diverge significantly: demand for 5/4nm and 3nm processes will likely remain strong through the end of the year, fueled by AI applications and flagship smartphone and PC main chips, while CoWoS advanced packaging will continue to experience supply shortages.

On the other hand, for mature nodes of 28nm and above, uncertainty in end-market sales, the onset of the traditional low season in Q1 2025, and reduced restocking demand for peripheral ICs such as TV SoCs, LDDIs, and panel-related PMICs following inventory build-ups in Q3 2024 are expected to weigh on demand. However, these negative factors are likely to be offset by the year-end sales push from Chinese smartphone brands and the surge in urgent orders triggered by China’s subsidy programs for device upgrades. As a result, utilization rates for mature nodes in Q4 are projected to remain stable or show slight growth compared to the previous quarter.

TrendForce reports that the revenue rankings of the top 10 foundries remained unchanged in Q3, with TSMC maintaining its dominant position with nearly 65% market share. The simultaneous launch of flagship smartphone products, AI GPUs, and PC CPU platforms drove an increase in TSMC's capacity utilization and wafer shipments, resulting in a 13% quarter-on-quarter revenue growth to $23.53 billion.

Samsung Foundry retained its position as the second-largest foundry by revenue. Despite securing some smartphone-related orders, its advanced process customers' products are approaching the end of their life cycles, while its mature process segment faced pricing pressure due to competition from Chinese peers. This led to a 12.4% quarter-on-quarter revenue decline for Samsung Foundry, with its market share dropping to 9.3%.

SMIC, ranked third in revenue, saw no significant increase in wafer shipments during Q3. However, thanks to optimized product mix and additional capacity from its 12-inch fabs driving shipments, its revenue grew by 14.2% quarter-on-quarter to $2.2 billion. UMC, ranked fourth, experienced improvements in both wafer shipments and capacity utilization compared to the previous quarter, resulting in a 6.7% quarter-on-quarter revenue growth to $1.87 billion. GlobalFoundries, ranked fifth, benefited from restocking orders for peripheral ICs for new smartphone and PC products. With increased wafer shipments and capacity utilization, its Q3 revenue rose by 6.6% to $1.74 billion.

Consumer restocking drives surge in peripheral component orders, improving capacity utilization for Tier 2 foundries.

TrendForce reports that HuaHong Group also received orders for peripheral ICs for new smartphone and PC products, coupled with restocking demand for consumer inventory. This boosted capacity utilization at its subsidiaries HLMC and HHGrace, leading to a 12.8% quarter-on-quarter revenue growth, achieving a market share of 2.2% and securing the sixth spot in the rankings.

Tower, ranked seventh, benefited in Q3 from orders for RF ICs used in smartphones and optical communication infrastructure components such as SiPho and SiGe for AI servers. Improved capacity utilization drove a 5.6% quarter-on-quarter revenue increase to $371 million.

VIS benefited in Q3 from orders for consumer LDDIs, panel/smartphone PMICs, and AI-related MOSFETs, resulting in growth in both capacity utilization and wafer shipments. Revenue increased by 6.9% quarter-on-quarter to $366 million, ranking eighth.

PSMC saw steady growth in memory foundry production in Q3, along with a surge in urgent orders for smartphone peripheral components in its logic business. This pushed its revenue to $336 million, ranking ninth.

Nexchip maintained its tenth-place ranking with Q3 revenue reaching $332 million, marking a 10.7% quarter-on-quarter increase.