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2023/03/13
According to TrendForce’s latest survey of the global foundry market, electronics brands began adjusting their inventories in 2Q22, but foundries were unable to rapidly adapt to this development because they reside in the more upper portion of the supply chain Moreover, revising procurement quantities of long-term foundry contracts takes time as well Hence, only some tier-2 and -3 foundries were able to immediately respond to the changes in their clients’ demand Also, among them, 8-inch wafer foundries made a more pronounced reduction in their capacity utilization rates As for the remaining foundries, the downward corrections that they made to their capacity utilization rates did not become noticeable until 4Q22 Hence, in 4Q22, the quarterly total revenue of the global top 10 foundries registered a QoQ decline for the first time after 13 consecutive quarters of positive growth The quarterly total revenue of the top 10 foundries came to US$33,530 million, reflecting a drop of 47% from 3Q22 Moving into 1Q23, TrendForce projects that the quarterly total revenue of the top 10 will show an even steeper drop on account of seasonality and the uncertain macroeconomic situation
Although TSMC and GlobalFoundries Actually Managed to Raise Revenue Market Share in 4Q22, Top Five Foundries All Inevitably Faced Massive Reduction in Orders
In 4Q22, foundries’ revenues were affected by an underwhelming peak season and their customers’ inventory corrections Even with stock-up activities related to new iPhones and Android smartphones, TSMC still posted a QoQ drop of 10% in revenue to reach US$19,962 million However, TSMC’s revenue market share climbed to almost 60% mainly because tier-2 and -3 foundries took a heavier hit with respect to customers’ inventory corrections Competitors’ weaker performances thus allowed TSMC to gain market share Regarding the revenues from TSMC’s process technologies, the decline in the revenues from the 7/6nm nodes was mostly offset by the rise in the revenues from the 5/4nm nodes The share of the ≤7nm nodes in TSMC’s overall revenue remained stable at 54%
Turning to Samsung, it experienced a drop in orders for advanced processes and a general demand contraction as its customers were concentrating on inventory reduction However, the demand drop associated with these factors was marginally offset by stock-up activities related to the components for the new iPhones and Android smartphones All in all, Samsung posted a QoQ drop of 35% in foundry revenue to reach US$5,391 million for 4Q22 TrendForce also points out that Samsung has lost a significant amount of demand for its ≤7nm nodes as Qualcomm and NVIDIA made the decision to reallocate orders for chips used in flagship hardware products Currently, there are no new major customers that can effectively address the idling production capacity caused by the order reallocation Therefore, the utilization rates of Samsung’s advanced processes are projected to remain at a low level of around 60% through 2023 In sum, Samsung lacks the momentum to achieve a positive YoY revenue growth for this year
Regarding other the major foundries, UMC saw a drop in both capacity utilization rate and wafer shipments in 4Q22, so its revenue fell by 127% QoQ to US$2,165 million In the aspect of wafer size and process technology, UMC saw a QoQ revenue decline for both 12- and 8-inch wafer foundry services, and its 035/025μm nodes had the worse revenue performance with a QoQ decline coming to 47% Conversely, in the case of GlobalFoundries, its revenue actually rose by 13% QoQ to US$2,101 million thanks to the optimization in its ASP and product mixes, as well as an increase in revenue from its non-wafer business GlobalFoundries was the only one among the top 10 to record a positive QoQ growth, and its revenue market share also climbed to 62% Turning to SMIC, it also saw a drop in both wafer shipments and wafer ASP As a result, its revenue slid by 150% QoQ to US$1,621 million Looking at SMIC’s revenue by application or production category, the sharpest drops were experienced by chips related to smart home and consumer electronics To get its customers to raise wafer input, SMIC has been offering price concessions However, this aggressive pricing strategy has not been particularly effective as customers are concerned about the risks associated with the US-China trade dispute Therefore, SMIC’s capacity utilization rate and revenue are expected to shrink further in 1Q23
Downturn of Display Panel Industry Led to Significant Revenue Drop for VIS and Nexchip, and the Latter Exited Top 10 Group
TrendForce notes that the extent of the impact from order cuts varied for individual foundries in 4Q22 Consequently, there were two notable changes in the quarterly revenue ranking from sixth to 10th place First, Nexchip fell out of the top 10 group and will unlikely return in the short term DB Hitek filled in the 10th place vacated by Nexchip in 4Q22 However, its capacity utilization rate dropped to 80-85% due to the recent market downturn DB Hitek posted a QoQ drop of around 124% in revenue to reach US$292 million Second, Tower, which was in ninth place in the 3Q22 ranking, benefited from the stable demand for chips based on specialty process technologies and a relatively steady flow of orders from European clients during 4Q22 Tower posted a marginal QoQ decline of 56% in revenue to reach US$403 million, and this result enabled it to surpass VIS to take eighth place in the 4Q22 ranking Conversely, VIS was impacted by the downturn of the display panel industry and the slumping demand for consumer electronics in 4Q22 With a QoQ decline of around 30% in wafer shipments, VIS also recorded a QoQ drop of 303% in revenue to reach US$305 million Because of this performance, VIS slipped to ninth place in the ranking
HuaHong Group benefited from the domestic demand for its specialty processes in 4Q22, but the same period also saw strong market headwinds that weakened the demand for logic ICs All in all, HuaHong’s overall revenue for the quarter fell by 265% QoQ to US$882 million Before this drop, HuaHong had maintained positive QoQ revenue growth for two straight years Lastly, looking at PSMC’s performance in 4Q22, capacity utilization rate slid significantly for both 8- and 12-inch wafer foundry Consequently, PSMC posted a QoQ decline of 273% in foundry revenue to reach US$408 million With this result, PSMC has recorded QoQ revenue drop for three consecutive quarters Its revenue market share also shrank to just 12% in 4Q22
For more information on reports and market data from TrendForce’s Department of Semiconductor Research, please click here, or email Ms Latte Chung from the Sales Department at lattechung@trendforcecom
For additional insights from TrendForce analysts on the latest tech industry news, trends, and forecasts, please visit our blog at https://insidertrendforcecom/
2022/12/08
According to TrendForce’s research, the total revenue of the global top 10 foundries rose by 6% QoQ to US$3521 billion for 3Q22 as the release of the new iPhone series during the second half of the year generated significant stock-up activities across Apple’s supply chain However, the global economy shows weak performances, and factors such as China’s policy on containing COVID-19 outbreaks and high inflation continue to impact consumer confidence As a result, peak-season demand in the second half of the year has been underwhelming, and inventory consumption is proceeding slower than anticipated This situation has led to substantial downward corrections to foundry orders as well For 4Q22, TrendForce forecasts that the total revenue of the global top 10 foundries will register a QoQ decline, thereby terminating the boom of the past two years—when there was an uninterrupted trend of QoQ revenue growth
TSMC Gained Market Share in 3Q22 Thanks to iPhone-Related Orders, and Top Five Foundries Accounted for Almost 90% of Global Market
Regarding individual foundries’ performances in 3Q22, the group of the top five was led by TSMC, followed by Samsung, UMC, GlobalFoundries, and SMIC Their collective global market share (in revenue terms) came to 896% Most foundries were directly impacted by clients slowing down their stock-up activities or significantly correcting down their orders Only TSMC was able to make a notable gain due to Apple’s strong stock-up demand for the SoCs deployed in this year’s new iPhone models TSMC saw its revenue rise by 111% QoQ to US$2016 billion, and the corresponding market share expanded to 561% The growth was mainly attributed to the ≤7nm nodes, whose share in the foundry’s revenue had kept climbing and reached 54% in the third quarter Conversely, Samsung actually experienced a slight QoQ drop of 01% in foundry revenue even though it had also benefited from the component demand related to the new iPhone series Partially impacted by the weakening of the Korean won, Samsung’s market share fell to 155%
Turning to UMC, its revenue went up by 13% QoQ to around US$248 billion for 3Q22 UMC’s performance was bolstered by the strengthening of the US dollar and the newly added 28nm production capacity that outputs higher-priced wafers GlobalFoundries posted a QoQ rise of 41% in revenue to around US$207 billion The growth was attributed to a QoQ increase in wafer shipments as well as further optimization in wafer ASP and product mix Furthermore, GlobalFoundries has been maintaining its capacity utilization rate above 90% Taking the last spot in the group of the top five, SMIC posted a slight QoQ increase of 02% in revenue to around US$191 billion SMIC has a product mix that is skewed towards consumer semiconductor components, so it saw smaller QoQ increases as well as QoQ declines in revenue performances across different applications and product categories as its clients had been focusing on inventory reduction This was especially noticeable for chips used in smartphones and several kinds of consumer electronics Nevertheless, SMIC’s revenue kept climbing because the optimization of its wafer ASP offset the issue with its product mix and the slide in its wafer shipments
The US government further expanded its export controls against China on October 7; and this development has definitely affected SMIC as its clients have become more hesitant in ramping up wafer inputs However, in the aspect of capital expenditure, SMIC is taking the opposite approach compared with most other foundries that have scaled back because of the changes in the market environment and the issue with the lead time for equipment orders Against headwinds, SMIC has raised its capital expenditure for 2022 by 32% to US$66 billion SMIC wants to speed up new equipment purchases for its three new fabs located in Shenzhen, Beijing, and Shanghai in order to minimize the risks associated with the US export controls Hence, it has raised capital expenditure in order to make advance payments on the new equipment that is set for deployment in 2023
Among the foundries placed from sixth to 10th in the 3Q22 revenue ranking, HuaHong Group and Tower posted a QoQ revenue increase, whereas PSMC, VIS, and Nexchip recorded a QoQ drop Nexchip experienced the largest decline among the top 10 mainly because of an imbalance between demand and production capacity Specifically, driver IC suppliers including Novatek, Chipone, and Ilitek had made downward corrections to their wafer input due to mounting inventory pressure Meanwhile, Nexchip continued with its capacity expansion As a result, Nexchip’s revenue fell by 225% QoQ to US$371 million for 3Q22 Its capacity utilization rate also slid to 80~85%
Foundries Will See Steeper Revenue Drop for 4Q22 as Orders for Consumer Semiconductor Components Undergo Larger Downward Corrections
In the consumer electronics market, inventory consumption has been slower than expected, so a turnaround will unlikely happen in short term With the slump continuing, foundry orders for chips used in consumer electronics will undergo larger downward corrections This, in turn, will affect foundries’ wafer shipments and capacity utilization rates For 4Q22, TrendForce believes that the majority of the global top 10 foundries will post either a smaller growth or a drop for their revenue results This wave of order corrections will eventually affect the industry leader TSMC as well While TSMC could see a larger-than-anticipated drop in 7/6nm orders, its revenue generation will still be sustained by 5/4nm orders Even though TSMC’s revenue for 4Q22 will not register a QoQ decline, it will likely to be mostly flat compared with 3Q22
Regarding foundries’ capacity utilization in 4Q22, UMC is still going to focus on adjusting its product mix so as to allocate more production capacity to chips used in automotive electronics and industrial equipment However, its capacity utilization rate will still drop by 10 percentage points because the declining orders for chips used in consumer electronics will result in a greater amount of idled production capacity GlobalFoundries will also not be able to maintain its capacity utilization rate as it has not secured enough long-term agreements for 8-inch wafer foundry Turning to HuaHong, its subsidiary HLMC will begin to see a slide in the capacity utilization rate of its 55nm node that manufactures the MCUs, Wi-Fi chips, and CMOS image sensors used in consumer electronics Likewise, PSMC’s capacity utilization rates for 8- and 12-inch wafer foundry will retreat to 60~65% and 70~75% respectively because of the ongoing order corrections related to CMOS image sensors, DDIs, and other logic chips VIS will see its capacity utilization rate fall to around 70% as well Lastly, Nexchip is at risk of suffering downward corrections to incoming orders for driver ICs and other chips used in consumer electronics (eg, PMICs and CMOS image sensors) At the same time, the foundry is constrained from adjusting its product mix because its other process technologies have yet to reach the mass production standard Due to these factors, Nexchip’s capacity utilization rate will shrink to around 50~55%
For more information on reports and market data from TrendForce’s Department of Semiconductor Research, please click here, or email Ms Latte Chung from the Sales Department at lattechung@trendforcecom
For additional insights from TrendForce analysts on the latest tech industry news, trends, and forecasts, please visit our blog at https://insidertrendforcecom/
2022/09/27
According to TrendForce research, due to steady weakening of overall demand for consumer electronics, inventory pressure has increased among downstream distributors and brands Although there are still sporadic shortages of specific components, the curtain has officially fallen on a two-year wave of shortages in general, and brands have gradually suspended stocking in response to changes in market conditions However, stable demand for automotive and industrial equipment is key to supporting the ongoing growth of foundry output value At the same time, since the creation of a marginal amount of new capacity in 2Q22 led to growth in wafer shipments and a price hike for certain wafers, this drove output value among top ten foundries to reach US$3320 billion in 2Q22 Quarterly growth fell to 39% on a weakening consumer market
A prelude to inventory correction was officially revealed in 3Q22 In addition to intensifying severity in the initial wave of order slashing for LDDI/TDDI, and TV SoC, diminishing order volume also extended to non-Apple smartphone APs and peripheral IC PMIC, CIS, and consumer electronics PMICs, and mid-to-low-end MCUs, posing a challenge for foundry capacity utilization However, the launch of the new iPhone in 3Q22 is expected to prop up a certain amount of stocking momentum for the sluggish market Therefore, top ten foundry revenue in 3Q22 is expected to maintain a growth trend driven by high-priced processes and quarterly growth rate is expected to be slightly higher than in 2Q22
With tide of inventory correction approaching, foundries furiously migrate production capacity to sectors of stable demand such as automotive and industrial equipment
Benefiting from strong demand for HPC, IoT, and automotive stocking activities, TSMC posted 2Q22 revenue of US$1815 billion but quarterly growth rate contracted to 35% due to wafer mark ups inflating the 1Q22 revenue base period As Nvidia, AMD, Bitmain, and other HPC customers continue to ramp up their new products for more advanced nodes, 5/4nm revenue increased by approximately 111% QoQ, securing this node the best revenue performance in 2Q22 Although the 7/6nm market was uncertain given murky mid/low-end smartphones market conditions and client order revisions, the node maintained a backstop in the form of mainstream products originating from HPC customers Revenue generated by this node increased by 28% QoQ
Samsung's 7/6nm production capacity has been gradually migrating to the 5/4nm process and yield rate has continued to improve, driving 2Q22 revenue to US$559 billion, a quarterly increase of 49% At the same time, the first 3GAE process using GAA architecture was officially mass-produced at the end of 2Q22 The first wave of customers includes PanSemi, a Chinese cryptocurrency mining company However, due to the complex 3nm production process, production will require two quarters Therefore, the 3nm node is not expected to contribute to revenue until the end of 2022, at the earliest UMC's new 28/22nm production capacity went online smoothly in 2Q22, driving the growth of overall wafer shipments and ASP This node's revenue share moved up to 22% this quarter while 2Q22 revenue reached US$245 billion, growing 81% QoQ, and the highest in the top ten
GlobalFoundries benefited from the release of a small amount of new production capacity and long-term agreement (LTA) guarantees for most of its production capacity Revenue in 2Q22 reached US$199 billion, a quarterly increase of 27% It is worth noting, assisted by the recent US CHIPS Act, Qualcomm, a major American manufacturer, signed a new contract with GlobalFoundries to extend their LTA period to 2028 with a significant increase in agreed volume, mainly producing 5G RF transceivers and Wi-Fi7 in Malta Fab8 at the 14/12nm node, aimed at supporting the localized production of wafers in the US SMIC's 2Q22 revenue reached US$190 billion, up 33% QoQ, while its proportion of revenue in the smartphone sector fell to 254% The smart home sector maintains strong growth momentum and revenue from related application products such as Wi-Fi, Bluetooth, PMIC, and MCU peripheral IC for networking and smart control devices increased by approximately 234% QoQ
Operating performance of second- and third-tier foundries peaked and utilization rate may decline in 2H22
The sixth to eighth positions are occupied by Hua Hong Group, PSMC, and VIS, respectively Except for PSMC, revenue posted by other operators was driven by factors such as increases in average selling price and production expansion, leading to marginal growth in 2Q22 revenue In terms of PSMC, foundry revenue in 2Q22 was US$656 million, down 14% QoQ Since consumer DDI and CIS were among the first wave of product orders revised by customers, this was reflected in the operating performance of each process platform while revenue from both HV and CIS processes declined PMIC increased by approximately 226% QoQ, reflecting that certain PMIC products retain stocking momentum and also demonstrating PSMC’s strategy of continuing to convert production lines to produce PMICs
Nexchip studiously expanded its production capacity and technology platform process diversity, driving overall wafer shipment growth and contributing to revenue Revenue in 2Q22 was approximately US$463 million, up 45% QoQ At the same time, in addition to partnering with SmartSens to develop 90nm CIS and continuously increasing production volume, the company also partnered with MediaTek to develop 01Xµm smartphone PMIC, contributing to non-driver IC business revenue Tower has no short-term plans to significantly expand production and its revenue was mainly driven by ASP and product mix optimization Revenue in 2Q22 reached US$426 million, up 12% QoQ
For more information on reports and market data from TrendForce’s Department of Semiconductor Research, please click here, or email Ms Latte Chung from the Sales Department at lattechung@trendforcecom
For additional insights from TrendForce analysts on the latest tech industry news, trends, and forecasts, please visit our blog at https://insidertrendforcecom/
2022/08/01
The disruption of the chip supply chain caused by the pandemic in the past two years, as well as geopolitical flashpoints such as Sino-US trade frictions and the Russia-Ukraine war, have led regional economies worldwide to focus more on the autonomy of local production and supply chains According to TrendForce research, in terms of 12-inch equivalent production capacity in various regions around the world, Taiwan will account for approximately 43% of capacity by 2025, followed by China at 27%, the United States at 8%, and South Korea at 12% In terms of advanced process capacity below 7nm (inclusive), Taiwan will account for approximately 69% by 2025, South Korea 18%, the United States 12%, and China 1% Compared with the landscape in 2022, it is obvious that the United States will increase its proportion of advanced process production capacity in the next three years, while China will focus on mature processes
However, as the US Congress is about to enter its August recess, the Senate and House of Representatives passed "HR 4346 The CHIPS (creating helpful incentives to produce semiconductors) and Science Act of 2022" (aka CHIPS Act) promptly last week and the bill officially enters the final leg of the legislative process and will take effect after it is signed by President Biden The draft bill not only covers wafer manufacturing R&D and factory construction subsidies, tax incentives, etc, but also proposes additional restrictions It proposes that companies that receive subsidies from the United States be barred from investing in process technologies below 28nm in China during the subsidy period to ensure that the CHIPS Act protects the competitiveness of the US semiconductor industry TrendForce indicates that the only semiconductor companies currently investing in expansion/fabs in the US and China are TSMC and Samsung It is worth continuing to pay attention to how the US CHIPS Act will restrict the Chinese investment of these two companies
China earnestly promoting domestic equipment but key equipment for advanced processes is controlled by US allies
Since the US "Entity List" expressly prohibits the sale of US technologies used in advanced processes of 1Xnm and below to enumerated companies, most Chinese foundries have turned to actively expanding mature process technologies of 28nm and above At the same time, China is also industriously developing domestic semiconductor equipment in an attempt to achieve a fully US-independent manufacturing line However, TrendForce indicates the US-aligned equipment manufacturers still control certain key semiconductor processing machinery at this stage US-affiliated equipment is especially crucial in advanced manufacturing processes below 7nm and it is quite difficult to achieve a fully US-independent production line in the short term
It is worth mentioning that SMIC began developing its N+2 (7nm) process technology for DUV exposure before being placed on the "Entity List" in 2020 R&D was conducted with the machinery purchased at that time and mining-related chips have recently been mass-produced officially However, according to TrendForce research, since chips below 7nm (inclusive) are approaching their physical limitations, if DUV technology is used in lieu of EUV technology, the chips will require more complicated production procedures, affecting yield and cost performance In addition, the structure of mining chip is relatively simple compared with other logic chips TrendForce believes that it may be quite difficult to produce more complex logic chips using this process and the mass production scale of N+2 (7nm) will be extremely limited as long as US-affiliated equipment shipments remain restricted
In summation, the disruption of the chip supply chain caused by the pandemic has stimulated regional economies to focus more on the issue of semiconductor autonomy In the context of the Entity List, whose implementation predates the pandemic by several years, the United States not only actively promotes domestic production lines through the CHIPS Act but also proposes additional restrictions to intensify and deepen sanctions against China's semiconductor industry and curbing its development From the foundry perspective, TSMC and Samsung recently invested in and established factories in the United States to focus on 5nm advanced processes, while most expansion activities in China are in mature processes above 28nm (inclusive)
According to TrendForce data, Chinese foundries are more active in expanding the production capacity of mature processes under the constraints of existing equipment According to TrendForce, the proportion of 12-inch equivalent production capacity in China will increase from 24% to 27% from 2022 to 2025, the highest growth rate among all regions However, only accounting for advanced processes (7nm and below), the United States will post the highest growth rate from 2022 to 2025, with its market share expected to grow to 12% by 2025
The equipment ban has become the biggest variable in Chinese production expansion The Trump administration previously requested the Netherlands halt its export of machinery to China through the Wassenaar Arrangement, making the export of equipment to China more difficult Since SMIC has successfully mass-produced 7nm process products recently, TrendForce believes that the United States may once again use the Arrangement to persuade the Netherlands to expand the scope of restrictions to DUV ArF immersion systems and deepen restrictions on China If the US is convincing, a dearth of DUV ArF immersion systems not only affects the feasibility of China developing advanced processes below 7nm (inclusive), since ArF immersion systems are also key in 40/28nm expansion, it may also do a great disserve to the semiconductor expansion plans of China’s primary 40nm and 28nm processes
For more information on reports and market data from TrendForce’s Department of Semiconductor Research, please click here, or email Ms Latte Chung from the Sales Department at lattechung@trendforcecom
For additional insights from TrendForce analysts on the latest tech industry news, trends, and forecasts, please visit our blog at https://insidertrendforcecom/
2022/06/23
According to TrendForce data, global wafer foundry capacity will increase by approximately 14% annually in 2022 Since expanding 8-inch capacity is not cost-effective and its growth rate is much lower than the overall industry average, 8-inch capacity will grow approximately 6% annually, while 12-inch capacity will grow 18% annually Of this new capacity, approximately 65% of new 12-inch capacity will be in mature processes (28nm and above) with an annual growth rate of 20% It is obvious that in 2022, most wafer foundries will focus on 12-inch wafer production capacity, with the main driving force behind production expansion coming from TSMC, UMC, SMIC, HuaHong Group’s HHGrace, and Nexchip
As the recent expansion activities of process nodes above 28nm focus on the diversified development of specialty processes, TrendForce has analyzed the recent trends of these specialty processes based on products such as Power-related, MCU, and AMOLED driver ICs First, power semiconductors can be roughly divided into two categories: power discrete and power IC Power discrete, with power transistors such as MOSFET and IGBT as mainstream products, is affected by 5G infrastructure, consumer fast charging, automotive electronics, and electric vehicles where the consumption of power components per unit of product has increased and demand has grown rapidly The overall market has long been dominated by international IDMs, such as Infineon, On Semi, and STM Global IDMs account for approximately 80~90% of the market while fabless firms account for approximately 10~20% In terms of foundries, in addition to increasing demand from existing fabless customers, due to the relatively conservative expansion process of IDMs’ own factories in recent years, capacity shortages have been commonplace and IDMs have also successively outsourced products to foundries HHGrace's power discrete revenue scale in 2021 was the greatest in the pure-play foundry field with the steady release of new 12-inch capacity in Wuxi to perpetuate revenue performance PSMC and Vanguard have also recently increased their 8-inch capacity to undertake related orders
In terms of PMIC, BCD (Bipolar-CMOS-DMOS) platform technology has mostly been adopted at this stage and mainstream manufacturing is performed at the 8-inch 018-011µm nodes Benefiting from upgraded technical specifications for 5G smartphones, data centers, and electric vehicles, demand for PMICs has spiked in recent years However, due to limited growth in 8-inch production capacity and the need to update peripheral ICs in response to the release of a new generation of SoCs, each foundry has also successively assisted clients in migrating certain PMICs to 12-inch production The plan is to migrate these PMICs to the 90/55nm nodes, focusing on applications such as smartphones and servers TSMC, UMC, PSMC, HHGrace, and SMIC, all have such plans
The eNVM (embedded Non-Volatile Memory) process possesses relatively diversified technology and eFlash is currently its mainstream process In addition, eNVM process applications are mostly used in smart cards and MCUs An MCU has a wide range of uses For example, industrial/automotive and consumer electronics such as information communication products, home appliances, and IoT products requiring simple functional commands to diverse complex applications, will use MCU components In addition, embedded memory technology for MCU will also vary based on slight differences in functionality Although the demand for consumer MCUs is relatively flat due to weak market conditions, MCU stocking momentum to meet automotive and industrial equipment demand is still strong, leading to a relative shortage of MCUs in the currently market In addition, IDMs have been increasingly outsourcing orders driven by the short-term consequences of the pandemic on the supply chain and the cost factors of MCU products moving to more advanced process nodes in the medium and long term, especially as the cost of expanding processes below 40nm (inclusive) has increased significantly This, in turn, stimulates the MCU application development and deployment of wafer foundries With an earlier mass production for processes below 40nm (inclusive) and process maturity, Taiwan's foundries have also accepted orders from IDMs, while the technology utilized by SMIC and HHGrace lag by approximately one generation, though HHGrace possesses the greatest production capacity among Chinese foundries
HV (High Voltage) process technology is mainly used in the production of display driver ICs At present, the mainstream includes the production of large/small size driver ICs at the 8-inch 018-011um process nodes, the production of TDDI at 12-inch 65/55nm, and the production of smartphone AMOLED driver ICs at 40/28nm Since the beginning of 2022, smartphone and consumer electronics market conditions have continued to be sluggish, balancing the supply of large-size driver ICs and TDDI However, since the overall penetration rate of AMOLED in mobile phones is still rising steadily, continued growth momentum is forecast in the medium and long term for AMOLED driver ICs Samsung, TSMC, UMC, and SMIC all have plans to develop 28nmHV The process technology of remaining players including HHGrace or Nexchip remain dominated by the 65/55nm nodes and they have yet to be able to mass produce AMOLED driver ICs
Mature processes are estimated to account for nearly 75~80% of production capacity in the next three years
According to TrendForce investigations, the compound annual growth rate of global foundry capacity will reach 11% from the period of 2021-2024, of which 28nm capacity in 2024 will reach 13 times that of 2022, the most active process node for mature process expansion More specialty process applications are expected to be migrated to 28nm and the global production capacity of mature processes above 28nm (inclusive) will stably maintain a 75-80% proportion of overall production capacity from 2021 to 2024, showing the market potential and importance of creating specialty mature processes
At the same time, TrendForce indicates, due to the impact of the pandemic on the global supply chain and geopolitics, regional "short-chain production" and supply chain autonomy have become key considerations for foundry expansion For example, in order to ally with regional production and improve the flexibility of capacity scheduling, Taiwanese foundries have corresponding expansion plans in the United States, Japan, China, and Singapore Except for TSMC's US fab, which focuses on advanced processes, remaining expansion plans focus on specialty process technologies In addition, recent expansion activities clearly show that foundries in mainland China are actively expanding mature process technology and capacity These companies are allocating the production of key peripheral ICs such as HV, MCU, PMIC, and power discrete, in order to enhance the autonomy of their supply chains and meet the needs of the domestic automobile, consumer electronics, and information and communication industries
For more information on reports and market data from TrendForce’s Department of Semiconductor Research, please click here, or email Ms Latte Chung from the Sales Department at lattechung@trendforcecom
For additional insights from TrendForce analysts on the latest tech industry news, trends, and forecasts, please visit our blog at https://insidertrendforcecom/
The Webinar, ”COMPUFORUM 2022 Webinar: Diverse Market Opportunities Generated by Applications of Cyber-Physical Systems” will start from June 15, 2022 The TrendForce research team including Mark Liu, Caron Ju, Bryan Ao, and Alex Chen will present speeches regarding memory, servers, and datacenters, respectively
【Info】
When：Wednesday, June, 15
Where：COMPUFORUM 2022 Webinar (Free to access)
