Taiwan's wafer foundry industry is set to generate a total of only US$77.9 billion in revenue in 2023, falling 13% from a year ago, with the decline having been adjusted bigger by close to 10pp from the previous forecast. Going into 2024, the Taiwan foundry industry will have new capacity coming online while smartphone application processors (AP) and high-performance computing (HPC) chips for AI and other applications will help boost foundry demand, according to DIGITIMES Research's latest report covering Taiwan's foundry industry.
Amid the challenging macroeconomic environment, the IT supply chain's inventory adjustment has extended into second-half 2023, dampening chip demand. Looking into 2024, the Taiwan foundry industry's revenue is expected to rebound but the growth may still be limited as the gloomy economic outlook will continue to curtail consumer spending on IT devices.
IT product inventory depletion was stagnant as the market faced macroeconomic pressure in first-half 2023, resulting in chip demand experiencing a nosedive. The average utilization rate of the Taiwan-based foundries dropped to 70% as of second-quarter 2023, dragging down their revenue performance in first-half 2023, the figures show.
In second-half 2023, new 5G smartphones, notebooks, PCs and servers will become available in the market, but the traditional strong season is likely to get suppressed amid poor macroeconomic conditions. Even if TSMC's 3nm revenue enjoys leaping growth, allowing the Taiwan foundry industry to perform better in second-half 2023 compared to first-half 2023, their whole-year 2023 revenue will still exhibit a significant decline from the 2022 level.
Their whole-year 2024 revenue is projected to grow 15%. However, according to macroeconomic forecasts by IMF and other organizations, the US, Europe and China each have their economic challenges to overcome. This will dampen IT product purchases and affect chip demand, bringing uncertainties to the Taiwan foundry industry going forward.
