In the first two periods of sharing (Prospects for Semiconductors and Electronic Components in 2024 (3): Semiconductor Design Section (I)AndProspects for Semiconductors and Electronic Components in 2024 (4): Semiconductor Design Section (Part Two)), China exportsemi.com has disassembled the forecast and prospect of the eight major market segments of the semiconductor design sector in 2024, and will usher in the market analysis and prospect of the "semiconductor manufacturing sector" from this issue. See the details:
Review and Prospect of Semiconductor Manufacturing Sector
Wafer OEM: "double U" form has the probability to establish an upward trend around 2Q24
Review of 2023 and Outlook of 2024; According to TRENDFORCE data, the global wafer OEM market of 3Q23 is about 28.3 billion US dollars (26.2 billion US dollars for 2Q23 and 27.3 billion US dollars for 1Q23), with QoQ+8%. The analysis shows that driven by factors such as 2H23 consumer electronics replenishment, the scale of 4Q23 global wafer OEM market is expected to continue to rise; It is estimated that the global wafer OEM market will be about US $112 billion in 2023, which will decline by 10-15% compared with 2022 due to the downward cycle of semiconductors. Although according to the latest quarterly public exchanges of listed wafer OEM companies, the current semiconductor recovery trend is still unclear. The current industry cycle will bottom out or present a "double U" form, which may encounter two bottoming; However, CICC believes that, on the one hand, the current chip inventory level has returned to normal, and on the other hand, key terminal products such as personal computers, smart phones and servers are expected to show positive growth in 2024, driving semiconductor demand. It is judged that the global wafer OEM market may establish an upward trend around 2Q24, and it is estimated that the global wafer OEM market will increase by 5-10% in 2024.
Figure 1: 3Q23 Revenue Ranking of Top Ten wafer OEM Enterprises in the World (Millions of US Dollars)
Advanced process manufacturing:3Q23 TSMC's latest N3 process was mass-produced for the first time, and its single-quarter revenue accounted for about 6% of the company's wafer revenue, making A17 Pro and other chips for Apple. At present, the global head chip designers have made it clear that the latest chips in 2024 will adopt TSMC N3 process, such as Apple A17, M3, NVIDIA B100, QUALCOMM Snapdragon 8Gen4 and MEDIA TEK Dimensity 9400. According to TSMC public communication, N2 process is currently under active research and development, and it is expected to be put into mass production in 2024 and 2025.
Mature process manufacturing:1H23 Some consumer electronics-related chips have been destocked and entered the replenishment stage, such as DDIC and CIS. According to the analysis, the "worst time" of wafer foundry activation may have passed. GLOBALFOUNDRIES 3Q23 wafer shipments and ASP are basically the same as 2Q23; UNITED MICROELECTRONICS 3Q23 revenue declined slightly, but the company's 28/22 nm revenue increased by about 10% quarter-on-quarter; The world advanced because DDIC and related PMIC inventory fell, the investment volume increased, and the revenue of 3Q23 increased by 3.8% month-on-month. It is predicted that in 2024, the replacement of personal computers and smart phones, as well as the volume of automatic driving and MR, will drive the growth of demand for various chips and the recovery of capacity utilization rate of fab. In this process, with the rise of chip design companies in Chinese mainland and the trend of local production in recent years, the analysis shows that the activation of wafer foundries in Chinese mainland is expected to be repaired faster. SMIC A/H is recommended.
Figure 2: 1Q17-3Q23 Crop Mobility Rate of Major Wafer Foundry Enterprises in the World
Sealing, testing and OEM: It is expected to enter normal seasonal fluctuations in 2024
1Q23, the packaging and testing foundry sector, formed the bottom of the medium-term industry prosperity, while 2Q23 and 3Q23 showed a recovery trend of capacity utilization rate and gross profit margin as a whole, but they were still affected by the differentiation of inventory structure of chip design customers. Due to the release of new consumer electronic terminal products such as mobile phones, PCs, wearable and other AIoT products in mid-2023, the competition among superimposed 3Q23 brand manufacturers around the "Double Eleven" intensified, and some mobile phone chips appeared urgent orders, which led to the rapid inventory clearing and replenishment demand. However, the prosperity of industry and other fields basically maintained a slow recovery state. Considering the total chip inventory of mobile phones and PC terminals at present, it is considered that the industry prosperity of traditional packaging and testing OEM (excluding Chiplet advanced packaging) will enter normal seasonal fluctuation in 1Q24.
From the perspective of capital expenditure, it is estimated that the total capital expenditure of domestic OEM in 2024 will be higher than that in 2023. In 2023, the overall capacity utilization rate of the industry was insufficient, and it was lower than 80% most of the time. Therefore, the foundry chose to reduce the equipment capital expenditure to reduce the negative impact of depreciation on profits. It is expected that as the industry enters normal seasonal fluctuations in 2024, the equipment capital expenditure is expected to recover. In terms of absolute value of capital expenditure, TONGFU Microelectronics is affected by the demand growth of AMD, a major customer, and its capital expenditure remains at the forefront of the industry. As a small and medium-sized comprehensive packaging and testing foundry, MICRO SILICON Electronics has basically equaled the leading CHANGJIANG Electronics Technology and HUATIAN Technology in its capital expenditure.
From the perspective of technical iteration, the advanced packaging industry with Chiplet (CoWoS-like) technology as the core has attracted the attention of packaging and testing foundry enterprises with the continuous growth of AI chip demand. It is expected that the above enterprises will continue to invest capital and manpower in research and development and expansion of production. From the perspective of industrial chain division of labor, it is considered that the major overseas HBM and CoWoS manufacturers will still be mainly HYNIX, SAMSUNG, TSMC, INTEL and other enterprises with strong wafer manufacturing capabilities, while due to the relatively backward development in China, there will be coexistence of wafer factories, IDM, packaging and testing factories and module factories in the future. It is suggested to pay attention to TONGFU Microelectronics, CHANGJIANG Electronics Technology, MICRO SILICON Electronics, CHANGCHUAN Technology and FASTPRINT Technology.
Figure 3: Year-on-year growth rate of quarterly revenue of the packaging and testing foundry sector;
Figure 4: Quarterly revenue growth rate of packaging and testing foundry sector
Figure 5: Quarterly gross profit margin of the packaging and testing foundry sector;
Figure 6: Quarterly net profit rate of packaging and testing foundry sector
Figure 7: Expenditure of domestic sealing and testing on behalf of wages
