According to a report by research firm Counterpoint on May 22, global wafer foundry revenue in the first quarter of 2024 decreased by 5% month on month, but increased by 12% year-on-year. SMIC jumped to the third largest wafer foundry in the world in the first quarter of 2024, second only to TSMC and Samsung, with a market share of 6%. The institution stated that the decline in revenue in the first quarter was not only affected by seasonal factors, but also due to a slowdown in demand for non artificial intelligence (AI) semiconductors such as smartphones, consumer electronics, the Internet of Things, automobiles, and industry.

From the specific performance of manufacturers, TSMC still ranked first in the first quarter, with a market share of 62% that exceeded expectations. TSMC's combined revenue in the first quarter of 2024 was approximately NT $592.64 billion, a year-on-year increase of 12.9%. TSMC will also extend the duration of the 50% annual compound growth rate of AI related revenue to 2028. Although it is expected that CoWoS production capacity will more than double year-on-year by the end of 2024, it still cannot meet the strong AI demand of customers. It is worth noting that due to the strong demand for AI chips, TSMC's 5nm production capacity utilization has remained strong.

Ranked second is Samsung, with a market share of 13%, an increase of 2 percentage points year-on-year. The Samsung Galaxy S24 series smartphones are a major highlight, but demand for mid to low-end phones is relatively weak. However, Counterpoint Research stated that the revenue of Samsung's wafer foundry business decreased year-on-year in the first quarter of this year, mainly due to the consumer electronics market entering a low season after Christmas 2023 and New Year 2024, resulting in a decrease in smartphone shipments. Samsung stated that sales of its flagship Galaxy S24 have remained stable, but the sustained weakening of demand for mid to low-end devices is the main reason. Samsung's wafer foundry business revenue may experience a double-digit percentage rebound in the second quarter.

SMIC's revenue in the first quarter was 1.75 billion US dollars, a year-on-year increase of 19.7% and a month on month increase of 4.3%, setting a record for the second highest revenue in the same period in history. This also drove SMIC's share in the global wafer foundry market in the first quarter to increase by 1 percentage point year-on-year to 6%, ranking third. This is also SMIC's first time entering the top three globally. According to Counterpoint Research analysis, this is mainly due to business growth such as CMOS Image Sensors (CIS), Power Management ICs (PMICs), IoT chips, and Display Driver ICs (DDICs), as well as market recovery. Inventory replenishment has expanded, and SMIC is expected to continue to grow in the second quarter and may reach mid to double-digit revenue growth for the year.

The fourth to sixth ranked manufacturers are Liandian (6%), Gexin (5%), and Huahong Group (2%), while these three wafer foundries mainly focus on mature processes. Due to weak demand for mature processes, their market share remains unchanged or declines year-on-year. Liandian expects the demand for automobiles to slow down in the short term, and Gexin expects its revenue to show an upward trend in the second quarter.

Counterpoint stated that as we enter the first quarter of 2024, we have observed signs of demand recovery in the semiconductor industry, although progress has been relatively slow. After several consecutive quarters of destocking, channel inventory has been normalized. The organization believes that, The strong demand for AI and the recovery of demand for terminal products will become the main growth drivers for the wafer foundry industry in 2024.

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