TrendForce, a market research firm, recently released the latest survey data on the revenue of global wafer foundry companies in the third quarter of 2023. Compared to the second quarter, TSMC, Samsung, and Gexin still hold the top three positions in market revenue. Intel's IFS foundry business has the highest quarterly growth rate among all enterprises, and it has entered the top ten global wafer foundry revenue list for the first time since Intel's financial split.
Stable head position, Intel leads the way
Compared to the competitive landscape in the wafer foundry market in the previous quarter, it can be observed that since the second quarter, the top seven companies in revenue rankings have not changed, namely TSMC, Samsung, Gexin, Liandian, SMIC, Huahong Group, and Gaota Semiconductor.
With downstream terminal and integrated circuit chip inventories gradually digesting to a healthy level, and driven by the demand for new phones launched by the iPhone and Android camps in the second half of the year, urgent orders for smartphone and laptop related components emerged in the third quarter. In a recent interview, Shen Bo, Global Vice President and China President of Dutch lithography giant ASML, also confirmed to First Financial reporters that according to the company's observation, the machine usage rate of international chip manufacturers is slowly recovering, and the industry is recovering.
In this context, with stable and rising customer orders, leading companies such as TSMC, Samsung, and SMIC have achieved significant growth while receiving basic support. The third quarter performance showed that TSMC's revenue increased by 10.2% month on month, reaching $17.25 billion. SMIC's revenue in the third quarter increased by 3.8% month on month, reaching 1.62 billion US dollars. Samsung's wafer foundry business benefited from the addition of major customer Qualcomm's mid to low end 5G and mature 28nm OLED products, with a revenue of $3.69 billion in the third quarter, a month on month increase of 14.1%.
The most significant change in performance is Intel's wafer foundry (IFS). Although Intel's OEM Services division still suffered an operating loss of $86 million in the third quarter, the division's revenue was $311 million, a year-on-year increase of 299%.
Jibang Consulting pointed out that Intel's IFS business benefited from seasonal factors in laptop procurement in the second half of the year, combined with its own advanced and high priced processes. These factors are also the reasons why Intel's IFS business revenue ranks in the top ten. It can be seen that the signs of recovery in the current consumer market have begun to be reflected in the revenue of Intel's OEM business.
Actively expanding production capacity
When commenting on the performance of the third quarter, Intel CEO Pat Gelsinger said, "Our performance in the third quarter was outstanding, thanks to the comprehensive progress of our process and product roadmap, agreements with new generation factory customers, and our momentum in bringing artificial intelligence to various fields." "By relentlessly advancing our strategy, rebuilding our execution engine, and fulfilling our commitments to customers, we continue to make meaningful progress in the IDM 2.0 transformation."
With the acceleration of market recovery, 2024 will be a year for semiconductor industry enterprises to accelerate their expansion of production capacity layout. The reporter learned from the enterprise that Intel is currently expanding its production capacity in advanced processes in an orderly manner. Intel 7 has achieved large-scale production, Intel 4 is ready for production, Intel 3 is progressing as planned, and the Intel 18A process is expected to be ready for mass production in 2024. In addition, Intel also invested $62.6 billion in three countries in June this year to expand its wafer foundries globally.
Chai Daixuan, Executive Director of CIC Zhuoshi Consulting, told First Financial reporters that Intel's choice to "aggressively" layout in wafer foundries may be due to various reasons. This includes expectations for future market demand growth, reducing supply chain risks, and improving technological competitiveness.
Currently, a group of customers have turned their attention to Intel's advanced OEM business. The first financial reporter recently learned from Ericsson that the company has confirmed that the latest generation of 5G chips to be launched in the future will be manufactured by Intel 4 technology. In addition, Ericsson plans to use Intel 18A technology to manufacture future 5G chips.
Earlier, UK chip IP designer Arm publicly stated that it would reach a cooperation agreement with Intel IFS to design SoCs based on Arm architecture for advanced process technology. The above businesses have brought many orders and market attention to Intel IFS business in the current booming era of 5G applications and artificial intelligence.
In addition, it should be noted that as the Biden administration increases subsidies for local semiconductor manufacturers, Intel is highly likely to become a strong competitor and major beneficiary of subsidies. Patrick Gersinger has held multiple meetings with senior government officials responsible for related subsidies. Intel has planned to use the government subsidies it receives to build its new factories in Ohio and Arizona, USA.
Regarding whether Intel's IFS business revenue can maintain its current market ranking in the future, Chai Daixuan pointed out that the global wafer foundry market is mainly monopolized by companies such as TSMC and Samsung, and Intel is still relatively small in this field.