On January 17th, the Science and Technology Innovation Board Daily reported that according to the Electronic Times in Taiwan, semiconductor equipment manufacturers reported that TSMC's revenue in the fourth quarter increased by 14.4% month on month, indicating that customer orders are gradually recovering. At the same time, TSMC's capacity utilization rate will also fully recover from January to February 2024.
It is estimated that the 8-inch factory, which previously experienced the fastest and most severe collapse, has returned to an average capacity utilization rate of 70% -80% from January to February 2024, and the 12 inch factory has also returned to the 80% mark. Among them, 28 nanometers have returned to a normal level of 80%, while the 7/6 nanometers process, which has fallen below 50% in the past year and a half, has risen to 75%. The 5/4 nanometers family has exceeded expectations and is approaching 100% full load. The 3 nanometers process, which has been priced at nearly $20000, has exceeded 70% in January and is estimated to reach over 85% in the first quarter.
However, this rebound is still the result of the destocking strategy. TSMC had previously admitted that although industrial inventories were nearing their bottom in the fourth quarter of 2023, it was still too early to achieve a V-shaped rebound due to overall economic and market weakness.
In addition, TSMC's processes below 7 nanometers currently account for nearly 60% of its revenue, and as the 5/3 nanometers increase, the proportion will further increase, which is the key to the annual revenue growth performance of over 20%. However, due to exchange rate fluctuations and a longer learning curve of 3 nanometers compared to 5 nanometers, the first quarter and full year gross profit margin will be under pressure, and the long-term goal of 53% is not easy.
The capacity utilization rate of mainstream wafer foundries is slowly improving
According to the above report by the Electronic Times, most semiconductor supply chains currently believe that 2024 is still a year of twists and turns. Judging from the conservative situation of many customers releasing orders, the market situation in the first half of 2024 has not yet turned hot, and the second quarter will be better. Customer inventory has reached its limit, and it will eventually begin to recover in the second half of the year. That is to say, the full activation of semiconductor growth momentum should start from June and July. TSMC has previously emphasized that 2024 is still a year of healthy growth and outperforms the overall market.
Looking at the entire wafer foundry field, the capacity utilization rate of mainstream companies is slowly improving. Based on the previous prediction from Sigmantell, the average capacity utilization rate of major global pure wafer foundries is expected to reach 84% in the fourth quarter of 2023, an increase of about one percentage point compared to the previous quarter; And as the inventory level in the semiconductor industry gradually decreases, the investment volume of IC design companies slowly rebounds. Coupled with the expectation of stable downstream demand recovery in 2024, the semiconductor market size is also expected to resume growth. It is expected that the global pure wafer foundry shipment volume in 2024 will be about 32.11 million pieces, a year-on-year increase of about 9.5%; By the fourth quarter of 2024, the average capacity utilization rate of major global pure wafer foundries can be restored to around 87%.
The wafer foundry industry is currently experiencing a significant expansion of mature processes. Guojin Securities recently stated that low-end processes may generate fierce competition, and foundry belongs to the heavy asset industry with obvious scale advantages. Therefore, they are optimistic about the long-term development of wafer factories with leading technology and scale advantages.
It is worth noting that tomorrow (January 18th), TSMC will hold a legal conference, marking the first time in four years that TSMC has resumed an offline legal conference. In addition to the 2024 annual revenue forecast, the focus of institutions also includes the current situation and outlook of semiconductor supply and demand for the year, whether capital expenditures will be slightly reduced to 30-32 billion US dollars as rumored, the progress of advanced processes such as 2 nanometers and A14, A10, and the progress of production expansion.
Wafer foundry is highly related to the semiconductor market. As a global leader in wafer foundry, TSMC has always been regarded as an industry benchmark. What signals will be revealed at the fair? We will wait and see.