The four leading foundries in Taiwan - Taiwan Semiconductor Manufacturing Company (TSMC), United Microelectronics (UMC), Powerchip Semiconductor Manufacturing (PSMC), and Vanguard International Semiconductor (VIS) - together generated a total of US$89.4 billion in revenues in 2022, soaring 31%. However, they also experienced the first on-quarter revenue decline since the hit of the COVID-19 pandemic in fourth-quarter 2022, according to DIGITIMES Research's collected figures from the latest study on Taiwan's wafer foundry industry.
Going into 2023, with the IT industry undergoing inventory correction on top of a slow season, the foundries' combined revenues for the first quarter are set to exhibit another sequential decline, which is estimated to exceed 10%, and the first on-year deceleration since second-quarter 2019. The weak global economy will also dampen the whole-year 2023 revenue growth momentum, the figures show.
The Taiwan-based foundries' 2022 revenues grew more than 30% on year but came somewhat short of DIGITIMES Research's projection made in October 2022 mainly due to clients cutting orders for smartphone and high-performance computing (HPC) chips and adjusting their long-term agreements (LTA) on top of the US government imposing new restrictions aiming at China's semiconductor industry starting October 2022. The decline in their fourth-quarter 2022 revenues also indicates the Taiwan foundry industry's boom may end.
Looking into 2023, with a global recession looming, although China lifting COVID-19 restrictions may rejuvenate the global economy, it is still uncertain when the economy and consumer spending will fully recover. Furthermore, shipments of electronic devices including smartphones and notebooks will remain weak while the bleak economic outlook will take a toll on shipments of server, industrial control, and automotive chips that are supposed to support semiconductor demand.
In view of this, the Taiwan-based foundries have reduced their capex in response to the short-term market changes. DIGITIMES Research, therefore, expects their 2023 revenues to decline 2.8%, turning from positive to negative growth.
