According to the latest report by market research firm TechInsights, the current global memory chip market is performing well, mainly benefiting from the strong demand for high-bandwidth memory and the growth of NAND flash memory usage in AI data centers. TechInsight expects that as the storage market recovers and companies are actively preparing for the upcoming sales season, the capacity utilization rate of semiconductor manufacturing plants has moved away from last year's trough and is expected to exceed 80% in the second half of 2024.
In recent years, with the rapid development of emerging technologies such as artificial intelligence, 5G communications, and the Internet of Things, the demand for high-performance and low-power chips has increased dramatically. Especially in the storage market, the demand for products such as high-bandwidth memory (HBM) and NAND flash memory continues to grow, providing foundries with a rich source of orders. At the same time, as companies actively prepare for the upcoming sales season, the capacity utilization rate of semiconductor manufacturing plants has been significantly improved.
In the field of wafer foundry, advanced process technology has always been the hot spot and focus of the market. According to reports from TechInsights and other institutions, the capacity utilization rate of advanced processes of 5nm and below in leading foundries such as TSMC is close to saturation. This trend not only reflects the strong market demand for high-end chips, but also reflects the continuous improvement of technology research and development and production capacity of wafer foundries. With the continuous maturity and popularization of advanced process technology, the capacity utilization rate of wafer foundries is expected to further increase.
Figure: The utilization rate of wafer foundries is expected to exceed 80% in the second half of 2024 (Source: Technews)
Forecasts from the World Semiconductor Trade Statistics Organization (WSTS) provide strong support for the future development of the foundry market. The organization expects global semiconductor industry sales to grow 16.0% in 2024 to an all-time high of $611.2 billion, and are expected to reach $687.4 billion in 2025. This forecast not only reflects the overall recovery trend of the semiconductor market, but also indicates that the wafer foundry industry will usher in a broader space for development.
In the Chinese market, foundries represented by SMIC and Hua Hong also showed strong growth momentum. The two companies have continued to improve their production capacity and technology level in the past year to meet the demand for high-end chips in domestic and foreign markets. With the further increase in market demand and the continuous improvement of capacity utilization, the competitiveness of Chinese wafer foundries in the global market will also continue to increase.
Although the foundry market has shown a strong recovery momentum and broad development prospects, the challenges cannot be ignored. On the one hand, the semiconductor market is highly volatile, and market demand and capacity utilization may be affected by a variety of factors. On the other hand, with the continuous advancement of technology and the intensification of market competition, foundries need to continuously invest in R&D and innovation to maintain a competitive advantage.
Looking ahead, TechInsights expects global fab capacity utilization to climb to around 80% in the second half of 2024 and reach an average of about 90% in 2025 as end-use demand fully recovers. As the demand for artificial intelligence (AI) continues to rise, fab equipment manufacturers and semiconductor peripheral material manufacturers will also take advantage of the momentum to achieve growth.
