Thanks to short-term orders from the electronics supply chain and HPC chip shipments, Taiwan's wafer foundry revenue increased by more than 10% in the fourth quarter of 2023, driving up the revenue for the entire year to US$79.1 billion, according to DIGITIMES Reseach's latest report on Taiwan's wafer foundry industry.
In the first-quarter 2024 slow season, Taiwan's foundry revenue is expected to decrease by 5.6% quarter-to-quarter due to seasonality affecting the electronics industry but will stabilize in the second quarter.
For the entire 2024, driven strongly by advanced manufacturing processes, revenue is now expected to grow by 20% – which is about 5% higher than the growth forecast made at the end of 2023.
In the fourth quarter of 2023, Taiwan's wafer foundry revenue was driven by rush orders from the electronics supply chain, plus shipments of HPC chips supporting cryptocurrency and servers. The full-year revenue in 2023 was better than expected, with an annual decline of 11.6%. Demand for 5/4/3nm processes was strong, but was weak for other node processes, with the average capacity utilization rate in the second half of 2023 remaining below 70%, the report's figures show.
DIGITIMES Research estimates that Taiwan's foundry capacity utilization rate will not climb above 70% until the second quarter of 2024. Weak chip demand has also started undermining wafer foundry prices since the second half of 2023.
The impact on wafer foundry Average Selling Price (ASP) is expected to emerge in the first and second quarters of 2024. DIGITIMES Research expects Taiwan's foundry revenue in the first quarter of 2024 to decrease 5.6% quarter-on-quarter due to the off-season impact on the electronics industry, but it will stabilize in the second quarter.
For 2024, shipments of major tech products, including handsets, notebooks, desktops, and servers, are expected to return to the positive growth track. The generative AI boom will drive shipment growths for handset APs and HPC chips for servers and PCs.
Demand for advanced chipmaking processes will remain strong. Taiwan's foundry revenue is expected to grow by nearly 20% annually in 2024 to almost US$95 billion.
