[News] Financial Reports of Foundries Released: How Will TSMC, SMIC, and Hua Hong Plan for 2025?

In 2024, the foundry industry continued to advance amidst market fluctuations and technological innovations. Leading foundries such as TSMC, SMIC, and Hua Hong Semiconductor have all released their annual financial reports.

Looking ahead to 2025, TrendForce predicts that the industry’s total output value will grow by 20%, driven by the rapid development of artificial intelligence. Industry insiders indicate that pricing strategies are becoming more differentiated, competition is intensifying, and a new wave of transformation is on the horizon.

TSMC Approves $17.14 Billion in Capital Expenditure and Invests an Additional $10 Billion in TSMC Global

TSMC’s total revenue for 2024 reached NT$2.8943 trillion, marking a 33.9% year-over-year increase. The company’s net profit after tax was NT$1.1732 trillion, with earnings per share (EPS) of NT$45.25—both record highs.

Notably, TSMC’s board of directors has approved approximately $17.14 billion in capital expenditures to expand and upgrade its advanced process capacities, as well as enhance its advanced packaging, mature, and specialty process capabilities. Additionally, TSMC plans to inject up to $10 billion into its subsidiary, TSMC Global, to reduce foreign exchange hedging costs.

SMIC Reports Record $8 Billion Annual Revenue with an 85.6% Capacity Utilization Rate

In 2024, SMIC achieved a record revenue of $8.03 billion, up 27.02% from 2023. However, the company’s gross margin was 18%, and net profit declined by 45.4% year-over-year to $493 million, mainly due to lower investment and financial income.

SMIC’s capital expenditure for 2024 was $7.33 billion, and by the end of the year, its 8-inch equivalent monthly wafer production capacity reached 948,000 wafers, with total wafer shipments exceeding 8 million.

For the first quarter of 2025, SMIC expects its revenue growth rate to surpass the industry average, while capital expenditures will remain roughly the same as in the previous year.

Hua Hong’s Inventory Adjustments Largely Completed in 2024

Hua Hong Semiconductor’s financial report for Q4 2024 showed revenue of $539.2 million, an 18.4% increase year-over-year and a 2.4% increase quarter-over-quarter. The gross margin stood at 11.4%, up 7.4 percentage points year-over-year but down 0.8 percentage points quarter-over-quarter.

For the full year, Hua Hong reported revenue of $2.004 billion, a 12.3% decrease from the previous year, mainly due to lower average selling prices, partially offset by increased wafer shipments. The company’s gross margin fell to 10.2%, down 11.1 percentage points year-over-year, primarily due to declining ASPs and rising depreciation costs.

Hua Hong’s operating expenses in 2024 totaled $360.9 million, an 8.4% increase from the previous year, driven by higher R&D expenditures and rising costs from new factory operations.

For Q1 2025, Hua Hong expects revenue to be between $530 million and $550 million, with a gross margin ranging from 9% to 11%.

How Will the Wafer Foundry Market Respond in 2025?

Regarding the outlook for 2025, SMIC CEO highlights two key trends. First, industries such as automotive are shifting to domestic supply chains, transitioning from validation to mass production, with some products entering full-scale manufacturing.

Second, with government policies stimulating consumer spending, inventory replenishment is increasing across sectors such as consumer electronics, IoT, and smartphones. As a result, the traditionally slow first quarter is expected to remain strong.

In terms of pricing, SMIC CEO notes that SMIC adheres to a market-based pricing strategy, maintaining prices without proactive reductions but willing to engage in strategic pricing discussions with key customers to maintain market share.

Meanwhile, TSMC has signaled price increases in its advanced process nodes. Starting in January 2025, the company plans to raise prices for its 3nm and 5nm processes by 5% to 10%, while the cost of its CoWoS (Chip on Wafer on Substrate) advanced packaging technology is expected to surge by 15% to 20%.

However, in the mature process segment, TSMC is offering mid-single-digit percentage discounts to customers with high-volume orders.

Powerchip Semiconductor Manufacturing Corporation (PSMC) is focusing on transformation, with its chairman announcing plans to shift away from producing widely used display drivers and sensor chips for the Chinese market in favor of developing 3D-stacked memory technology.

United Microelectronics Corporation (UMC) acknowledged the challenges of global capacity expansion, stating that it is collaborating with Intel to develop smaller and more advanced chips while diversifying beyond mature process manufacturing.

According to TrendForce’s latest forecast, the global wafer foundry industry is expected to grow by 20% in 2025, driven primarily by AI advancements and continuous improvements in advanced process technology.

The development of AI, particularly in Cloud AI and Edge AI, is anticipated to bring new opportunities to the industry. Additionally, AI-driven demand for power management chips may inject new vitality into the mature process sector.

TSMC is expected to maintain its leadership in advanced process nodes. By 2025, TrendForce predicts that TSMC’s CoWoS capacity will double to 75,000–80,000 wafers per month, fueled by the growing demand for AI-related customized chips and advanced packaging solutions.

(Photo credit: SMIC)