Sharing in the previous two issues ( Outlook for Semiconductors and Electronic Components in 2024 (3): Semiconductor Design Sector (Part 1) and Outlook for Semiconductors and Electronic Components in 2024 (4): Semiconductor Design Segment (Part 2) ), China Overseas exportsemi net is You have dismantled the forecasts and prospects of the eight major market segments of the semiconductor design sector in 2024. Starting from this issue, we will usher in the market analysis and prospects of the "semiconductor manufacturing sector". Please see the details:
Semiconductor Manufacturing Sector Review and Outlook
Wafer Foundry: The "double U" pattern is likely to establish an upward trend around 2Q24
Review of 2023 and Outlook for 2024: According to data from TrendForce, the global foundry market size in 3Q23 was approximately US$28.3 billion (US$26.2 billion in 2Q23 and US$27.3 billion in 1Q23), with QoQ +8%. Analysts believe that driven by factors such as consumer electronics replenishment in 2H23, the size of the global wafer foundry market in 4Q23 is expected to continue to rise; the global wafer foundry market size is expected to be approximately US$112 billion in 2023. Affected by the semiconductor down cycle, it will be 20% higher than that in 2022. 10-15% decline. Although according to the latest quarterly public exchanges between listed wafer foundry companies, the current semiconductor recovery trend is still unclear. The bottom of this industry cycle may appear in the form of a "double U" and may experience two bottoms; however, China Jin Analysis believes that on the one hand, the current chip inventory level has returned to normal, on the other hand, key terminal products such as personal computers, smartphones, and servers are expected to show positive growth in 2024, driving semiconductor demand. It is judged from this that the global wafer foundry market is likely to establish an upward trend around 2Q24, and it is expected that the global wafer foundry market will grow by 5-10% in 2024.
Figure 1: Revenue ranking of the world’s top ten foundry companies in 3Q23 (USD million)
► Advanced process manufacturing: TSMC's latest N3 process was mass-produced for the first time in 3Q23. Its single-quarter revenue accounted for about 6% of the company's wafer revenue, and it OEMs chips such as the A17 Pro for Apple. At present, the world's leading chip design manufacturers have made it clear that the latest chips in 2024 will use TSMC's N3 process, such as Apple A17, M3, Nvidia B100, Qualcomm Snapdragon 8Gen4, and MediaTek Dimensity 9400. According to TSMC’s public communications, the N2 process is currently under active research and development, with risk trial production expected in 2024 and mass production expected in 2025.
► Mature process manufacturing: In 1H23, some consumer electronics-related chips have completed destocking and entered the stage of replenishing inventory, such as DDIC and CIS. Analysts believe that the "worst moment" of wafer foundry utilization rate may have passed. GlobalFoundries' wafer shipments and ASP in 3Q23 were basically the same as those in 2Q23; UMC's revenue in 3Q23 declined slightly, but the company's 28/22nm revenue increased by about 10% quarter-on-quarter; World Advanced's revenue in 3Q23 increased by 3.8% quarter-on-quarter due to the decline in DDIC and related PMIC inventory and the increase in wafer volume. It is expected that the replacement of personal computers and smartphones in 2024, as well as the increase in autonomous driving and MR, will drive the growth of demand for various chips and drive the recovery of wafer fab capacity utilization. In this process, with the rise of chip design companies in mainland China in recent years and the trend of localized production, analysts believe that the utilization rate of wafer foundries in mainland China is expected to be repaired faster. SMIC A/H is recommended.
Figure 2: Utilization rate of major global foundry companies from 1Q17 to 3Q23
Packaging and testing OEM: expected to enter normal seasonal fluctuations in 2024
The packaging and testing foundry sector has formed the bottom of the mid-term industry prosperity in 1Q23. In 2Q23 and 3Q23, the overall production capacity utilization rate and gross profit margin have recovered, but it is still affected by the differentiation of the inventory structure of chip design customers. Due to the release of new consumer electronics terminal products such as mobile phones, PCs, wearables and other AIoT products in mid-2023, and the intensified competition among brand manufacturers around the "Double Eleven" in 3Q23, some mobile phone chips have experienced urgent orders, which has driven up inventory levels. Quick clearance and replenishment requirements. However, the prosperity of industry and other fields has basically maintained a state of slow recovery. Taking into account the current total chip inventory of mobile phones and PC terminals, analysts believe that the industry prosperity of traditional packaging and testing foundries (excluding Chiplet advanced packaging) will enter normal seasonal fluctuations in 1Q24.
From the perspective of capital expenditure, it is expected that the total capital expenditure of domestic packaging and testing OEMs in 2024 will be higher than that in 2023. The overall capacity utilization rate of the industry is insufficient throughout 2023, and is below 80% most of the time. Therefore, foundries choose to reduce equipment capital expenditures to reduce the negative impact of depreciation on profits. It is expected that as the industry enters normal seasonal fluctuations in 2024, equipment Capital spending is expected to recover. From the absolute value of capital expenditure, Tongfu Microelectronics has been affected by the growth of demand from major customers AMD, and its capital expenditure has remained at the forefront of the industry. As a small and medium-sized comprehensive packaging and testing foundry, Yongsilicon Electronics has basically tied the capital expenditure of the leading Changdian Technology and Huatian Technology.
From the perspective of technology iteration, the advanced packaging industry with Chiplet (CoWoS-like) technology as the core has attracted the attention of packaging and testing OEM companies as the demand for AI chips continues to grow. It is expected that the above-mentioned companies will continue to invest funds and manpower in research and development and expand production. . From the perspective of division of labor in the industrial chain, analysts believe that major overseas HBM and CoWoS manufacturers will still be dominated by companies with strong wafer manufacturing capabilities such as Hynix, Samsung, TSMC, Intel, etc., while domestic development will be relatively lagging behind. There may be coexistence of wafer factories, IDMs, packaging and testing factories, and module factories. It is recommended to pay attention to Tongfu Microelectronics, Changdian Technology, Yongsilicon Electronics, Changchuan Technology, and Xingsen Technology.
Figure 3 : Year-on-year growth rate of quarterly revenue of the packaging and testing foundry sector ; Figure 4 : Quarterly growth rate of quarterly revenue of the packaging and testing foundry sector
Figure 5 : Quarterly gross profit margin of the packaging and testing OEM sector ; Figure 6 : Quarterly net profit margin of the packaging and testing OEM sector
Figure 7 : Domestic packaging and testing agency capital expenditures
Outlook for Semiconductors and Electronic Components in 2024 (1): Industry Review in 2023
Semiconductor and Electronic Components Outlook 2024 (5): Semiconductor Manufacturing Sector
Outlook for Semiconductors and Electronic Components in 2024 (7): Panel/PCB/Component Sector
