In the face of ongoing geopolitical unrest, regions worldwide are urgently developing local semiconductor supply chains to ensure stability. Taiwan, with a market share of 65% in Q2 this year, is at the forefront, with TSMC alone accounting for 56%.
Countries are vying to attract foundry leaders with generous subsidies, hoping to root the semiconductor industry locally. This has put Taiwan’s pivotal role and the future changes in the global production capacity map under the spotlight.
The global foundry revenue is expected to decline by 12.5% in 2023, more severe than the 2019 recession. However, a growth of 6.4% is anticipated in 2024, driven by TSMC’s high-priced advanced processes and the inventory replenishment momentum of the supply chain.
The global economic recession in 2024 will continue to impact the foundry market. However, the inventory problem is expected to ease in H1 2024, driving order recovery from mid-2024.
Export control of equipment by the US, Japan, and the Netherlands will affect the expansion plans of Chinese foundries. The future global foundry will move from global division of labor to regionalization due to geopolitics, leading to more dispersed global semiconductor industry’s production capacity.
After a two-year inventory correction cycle, the global foundry capital expenditure will decline more than this year in 2024. Foundries have successively delayed their capacity expansion plans.
The development of AI servers has been booming in recent years, with the annual growth rate of shipments close to 40% for two consecutive years. However, AI chips still have limited impact on the overall foundry, indicating that although AI chips are developing vigorously, they still have limited impact on the overall foundry.
