Dynamics in the semiconductor foundry industry and strong demand for AI products have led to the revenue at the top ten foundries increasing by 3.7% in the first quarter, says market research firm TrendForce. The research firm adds that underutilization for some nodes fell during the first quarter, and with manufacturers expecting utilization to grow in the second quarter, wafer prices can also rise later during the year.
Top Global Foundries See Revenue Grow Despite Lower Smartphone Demand, Says Research Firm
The first quarter of a calendar year is a slow quarter for foundries since smartphone demand typically slows down. Smartphones, such as Apple's iPhone, launch in the third quarter, preceding which orders are placed at foundries to ramp up production for the succeeding launches.
However, as per TrendForce, strong demand for AI high-performance computing (HPC) and products in the consumer electronics supply chain led to strong global foundry revenue performance in the first quarter. Specifically, the firm shares that the revenue at the top ten largest foundries grew by 3.7% sequentially during the quarter.
Apart from the AI HPC chips, demand from the television, personal computer and notebook supply chains also accelerated the revenue growth, says the firm.
TSMC Continues To Benefit From Robust High-End AI Demand
The corresponding higher utilization rates for some manufacturing process technology nodes can also lead to higher prices later in the year, says the research firm. As a result, some firms can potentially place orders in advance to lock in the lower prices.
High memory prices driven by tightness in the memory production market have also led to PC manufacturers pulling their orders forward.
The high demand from the AI sector and power management industry can cause foundry revenue to touch another high in the second quarter, TrendForce adds. Delving deeper, the firm adds that TSMC has benefited from AI CPU demand, along with AI server GPUs and XPUs.
On the other hand, Samsung has benefited from the television, PC and notebook supply chains but suffered from the weakness in the smartphone sector. China's SMIC, which, despite US sanctions, is the third largest pureplay foundry in the world in terms of revenue, has benefited from the same sectors as Samsung.
The strength in the AI market led to TSMC gaining market share in the first quarter despite the period being seasonally slow. The high demand also meant that the Taiwanese fab was the only firm that grew its market share in the first quarter.
About the author: Ramish is a seasoned technology writer and editor with more than a decade of experience. He specializes in semiconductor fabrication and market analysis. With a background in finance and supply chain management - via his bachelors in Finance and a micromasters in supply chain management from MIT - Ramish combines financial rigor with deep industry insight to deliver accurate and authoritative coverage.
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