TSMC trims semiconductor, foundry forecast for 2024
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TSMC has lowered its 2024 forecasts for the chip market and foundry sector but maintained a strong growth prediction for itself on the strength of AI demand.
CC Wei, CEO of TSMC, said that continued macroeconomic and geopolitical uncertainty could weigh on consumers and supress end-market demand producing a softer, more gradual recovery in 2024. Wei added that a gradual recovery in smartphone and PC markets is being supplemented by very, very strong AI-related data center demand, which preferentially favours TSMC.
“We lowered our forecast for the 2024 overall semiconductor market, excluding memory, to increase by approximately 10 percent year-over-year, while foundry industry growth is now forecast to be mid- to high-teens percent, both are coming off the steep inventory correction and low base of 2023,” said CC Wei, CEO of TSMC, during an analysts’ conference call to discuss the company’s 1Q24 financial results.
“Having said that, we continue to expect 2024 to be a healthy growth year for TSMC. Supported by our technology leadership and broad customer base, we expect that our business to grow quarter-over-quarter throughout 2024 and reaffirm our full-year revenue to increase by low to mid-20 percent in US dollar terms,” Wei said.
“In summary, our technology leadership enables TSMC to win business and enables our customer to win business in their end market. Almost all the AI innovators are working with TSMC to address the insatiable AI-related demand for energy-efficient computing power,” he said.
When defined by application sector in the 1Q24 high-performance computing – including AI processors – accounted for 46 percent of the company’s revenue of about US$18.33 billion.
Smartphone decreased to account for 38 percent. IoT and Automotive accounted for 6 percent each and digital communications equipment account for 2 percent.
By technology TSMC’s 1Q24 wafer revenue breaks down as:
- 3nm: 9 percent
- 5nm: 37 percent
- 7nm: 19 percent
- Aggregate advanced technology: 65 percent
- Mature technology (12nm and above): 35 percent
TSMC said it expects revenue from AI processors for servers to double in 2024 and account for low-teens of percent of total revenue. This will enjoy a compound annual growth rate of 50 percent for five years and be more than 20 percent of TSMC revenue in 2028
Server AI processors are narrowly defined as GPUs, AI accelerators and CPUs performing training and inference functions and do not include the networking edge AI or AI within smartphones and personal computers.
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