Research: AI demand is strong, China market is recovering, global foundry industry revenue increased 26% in Q4 last year

2025/04/30

TechNews Technology News
March 18, 2025
Author Lin Yurou

According to the latest "Quarterly Foundry Tracking Report" by research firm Counterpoint Research, the global foundry industry's revenue in the fourth quarter of 2024 increased by 26% year-on-year and 9% quarter-on-quarter, mainly driven by strong demand for AI and the continued recovery of the Chinese market. The capacity utilization rate of advanced process nodes remains high, driven by demand for AI and flagship smartphones, especially TSMC's N3 and N5 processes.

However, the capacity utilization rate of mature process fabs around the world (excluding China) remained low in the fourth quarter of 2024, hovering between 65% and 70%, among which the 12-inch recovery was better than the 8-inch node, which was greatly affected by weak demand in the automotive and industrial fields. The recovery of non-AI demand is gradually emerging, especially in the consumer electronics and PC semiconductor fields, driven by US tariff reserve inventory and China's subsidy demand.

As AI and high-performance computing (HPC) continue to drive demand for advanced processes, advanced packaging technology has become the key to industry growth. TSMC is actively expanding CoWoS-L and CoWoS-R production capacity, effectively resolving market concerns about capacity and order adjustments, and further consolidating its leading position.

TSMC's fourth-quarter financial report is impressive, Samsung's wafer foundry revenue slightly decreased

TSMC's fourth-quarter financial report for 2024 is impressive, with gross profit margin exceeding expectations and market share increasing from 64% in the previous quarter to 67%, a record high. The company expects revenue to grow at a mid-term level of 20% in 2025, while the overall wafer foundry industry is expected to grow by 10%, which will continue to outperform the market. In the long run, TSMC's revenue compound annual growth rate (CAGR) from 2024 to 2029 is expected to reach 20%, and AI accelerator revenue will grow at a mid-range level of 40%, far exceeding market expectations.

Samsung Foundry's revenue in the fourth quarter decreased quarter-on-quarter, mainly due to lower-than-expected demand for Android smartphones. Low utilization and high R&D expenses (probably related to advanced process development) affected operating performance, and weak demand for mobile devices caused its market share to drop from 12% in the third quarter to 11%. Despite short-term challenges, Samsung focuses on long-term growth and plans to increase sales of AI and HPC products and promote 2nm GAA technology, aiming to mass produce in 2025 to enhance competitiveness.

SMIC is conservative about the market outlook, and UMC is stable

SMIC's performance in the fourth quarter of 2024 was in line with expectations, with revenue growth driven by the recovery of consumer electronics demand and localization in China. Shipments of 12-inch wafers continued to increase, while 8-inch wafers were weaker due to early pull-in in the first half of the year, and total utilization fell from 90.4% in the previous quarter to 85.5%. Although the guidance for the first quarter of 2025 is optimistic, supported by Chinese consumer subsidies and US tariff preparation demand, the company is conservative about the outlook for the second quarter and the second half of the year due to the lack of strong demand momentum and oversupply in the industry.

UMC's performance in the fourth quarter of 2024 was in line with previous expectations, with urgent orders for consumer electronics supporting wafer shipments, but price pressure and the impact of the January earthquake in Taiwan on gross margins made the outlook for the first quarter of 2025 soft. Demand for Wi-Fi, TVs and display driver ICs has begun to recover, but management remains cautious about the overall market momentum. UMC is optimistic about the long-term opportunities of interposer technology, photonic ICs and high-voltage processes, but it is difficult to make significant contributions in the short term, and mature process revenue is expected to grow in the low single digits in 2025.

GlobalFoundries' performance in the fourth quarter of 2024 was stable, with wafer shipments offsetting seasonal weakness in smartphones. Automotive demand surged due to increased design-in, and communication infrastructure and data center revenue also grew due to demand for optical transceivers, satellite communications and AI inference chips. The initial recovery of home and industrial IoT has driven quarterly revenue growth. Although the outlook for the first quarter of 2025 is weak due to seasonality and macroeconomic challenges, the company expects stable revenue growth for the full year, mainly supported by automotive momentum and AI-related opportunities.

Adam Chang, an analyst at Counterpoint Research, said that the strong performance of the wafer foundry industry in the fourth quarter of 2024 mainly came from the surge in demand for AI and flagship smartphones, which maintained high utilization rates for advanced processes. AI and HPC applications continue to drive growth, highlighting the importance of advanced packaging such as CoWoS and SoIC. However, the 8-inch mature process faces challenges due to weak automotive and industrial demand. Looking ahead to 2025, AI-driven advanced process growth and the stability of mature processes will be key trends.

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