Counterpoint released the global foundry market share ranking for the fourth quarter of 2023, showing that TSMC maintained its leadership status with a 61% market share driven by strong demand from AI and the restocking of smartphones.
TSMC 5nm capacity utilization reached 100%, thanks to strong demand for AI GPUs from Nvidia. Meanwhile, Apple's iPhone 15 continued to drive growth at the leading 3nm node. These two catalysts contributed sub-7nm node revenue, which accounted for approximately 70% of TSMC's total revenue for the quarter, demonstrating the company's technological competitiveness.
"AI demand is expected to remain strong in 2024 as TSMC CoWoS capacity increases. Meanwhile, the foundry market is very close to the bottom of the semiconductor inventory cycle. TSMC will be a major beneficiary of the AI megatrend and the recovery in logic semiconductor demand," Counterpoint analyst Adam Chang was cited in a press release.
TSMC and Samsung are the only two firms that enjoyed an increase in market shares from the previous quarter. TSMC added 2%, while Samsung Foundry retained its status as the second-largest player with a 14% market share, up from 13% in the third quarter, benefiting from smartphone restocking and positive initial pre-orders for the Samsung S24 series AI smartphones.
Counterpoint said GlobalFoundries and UMC both captured a 6% market share. However, subdued demand and customer inventory adjustments, particularly in automotive and industrial applications, impacted the 2024 guidance for both companies.
Source: Counterpoint
SMIC's market share slid from 6% in the third quarter to 5% in the fourth quarter of 2023. SMIC anticipates increased demand for smartphone-related components in the short term, perhaps attributable to Huawei's launch of the Pura 70 series of smartphones in the second quarter of 2024.
However, Counterpoint said a cautious outlook prevails for the full year for SMIC due to uncertainties in demand sustainability, echoing muted sentiments across mature node foundries.
The foundry industry's revenues grew about 10% sequentially in the fourth quarter of 2023 but declined 3.5% year-on-year. Despite continued macroeconomic uncertainty, the industry began to bottom out in the second half of 2023 with replenishment demand in the smartphone and PC segments, led by supply chain inventories. Urgent orders have been seen for PC and smartphone apps, particularly in the Android smartphone supply chain.
