Foundry Industry Sees Robust 3Q23 Growth Fueled by Smartphone and Notebook Component Demands

The third quarter of 2023 witnessed a thriving phase for the global foundry industry, marked by an impressive surge in urgent orders for smartphone and notebook components, according to TrendForce’s latest research.
Foundry business revenue growth and shareThis surge, driven by healthy inventory levels and the release of new iPhone and Android devices, was executed primarily as rush orders amidst lingering inflation risks and market uncertainties. The top ten global foundries recorded a substantial 7.9 percent quarter-on-quarter (QoQ) increase, reaching a total value of approximately US$28.29 billion.

Looking ahead to the fourth quarter of 2023, the Foundry business anticipates sustained inflow of urgent orders, especially for smartphone components, driven by the expected year-end festive demand. Despite the gradual recovery of the end-user market, pre-sales season stockpiling for Chinese Android smartphones is showing promising signs. This includes demand for mid-to-low range 5G and 4G phone application processors (APs) alongside continued interest in new iPhone models. As a result, this forecasts a continued upward trajectory for the top ten global foundries in Q4, potentially surpassing the growth rate witnessed in Q3.

Among the key players, TSMC’s 3nm manufacturing process claimed a significant 58 percent market share in Q3, contributing substantially to the company’s revenue growth. TSMC reported a revenue increase of 10.2 percent, reaching US$17.25 billion, propelled by strong demand in the PC and smartphone sectors, including orders for new iPhones and Android devices. The 3nm process alone contributed 6 percent to TSMC’s Q3 revenue.

Samsung Foundry also experienced robust growth, achieving a 14.1 percent QoQ revenue increase to US$3.69 billion, fueled by orders for Qualcomm’s mid-to-low range 5G AP SoC, 5G modems, and mature 28 nm OLED DDI processes.

GlobalFoundries maintained stable performance with revenue approximating US$1.85 billion, predominantly supported by the home and industrial Internet of Things (IoT) sectors, as well as significant orders from the US aerospace and defense sectors.

UMC, despite facing adjustments in automotive orders, benefited from urgent orders, offsetting the decline in overall wafer shipments. UMC’s revenue experienced a minor quarterly decrease of 1.7 percent, totaling approximately US$1.8 billion.

SMIC saw a 3.8 percent revenue increase to US$1.62 billion in Q3, propelled by seasonal consumer product demands, especially urgent smartphone-related orders. However, the revenue share from American clients decreased to 12.9 percent, while revenue from Chinese clients increased to 84 percent.

The rankings from sixth to tenth position witnessed notable changes with IFS making its debut and showing the highest revenue growth in Q3. IFS recorded a 34.1 percent increase in revenue to approximately US$311 million, benefitting from seasonal laptop orders and contributions from advanced high-priced processes.

Other companies like HuaHong Group, HHGrace, Tower Semiconductor, and PSMC experienced varying degrees of revenue changes, highlighting the dynamic nature of the industry in Q3 2023.