• The global foundry industry’s revenue increased 26% YoY and 9% QoQ in Q4 2024, driven by robust AI demand and continued recovery in China.

• Industry utilization rate for leading-edge node demand remained high driven by AI and flagship smartphone demand.

• Non-AI demand is gradually recovering in applications such as consumer electronics and PC semiconductors, driven by US tariff-related prebuild and China subsidy-related demand.

• Advanced packaging demand was strong and stable, with TSMC expansion focused on CoWoS-L, addressing previous market concerns about CoWoS capacity and order adjustments.

Seoul, Beijing, Buenos Aires, Fort Collins, Hong Kong, London, New Delhi, Taipei, Tokyo – March 17, 2025

The global foundry industry’s revenue grew 26% YoY and 9% QoQ in Q4 2024, according to Counterpoint Research’s Foundry Quarterly Tracker . The growth was primarily fueled by robust AI demand and continued recovery in China. Leading-edge node utilization remained high, driven by AI and flagship smartphone demand, particularly for TSMC’s N3 and N5 processes. Meanwhile, global mature-node foundries (excluding China) continued to struggle with weak utilization rates, hovering around 65%-70% during the quarter. Within this segment, 12-inch nodes experienced a stronger recovery than 8-inch nodes, as the latter faced higher exposure to the auto and industrial sectors, where demand remained sluggish. However, non-AI demand is gradually recovering, particularly in consumer electronics and PC semiconductors, supported by US tariff-related prebuild and China’s subsidy-driven demand, offering some optimism for broader market stabilization.

As AI and high-performance computing (HPC) continued to drive leading-edge demand, advanced packaging played a crucial role in sustaining industry growth. TSMC reinforced this trend by aggressively expanding its CoWoS-L/CoWoS-R capacity, addressing previous market concerns about capacity and order adjustments.

Source: Counterpoint Research

TSMC delivered robust Q4 2024 results, with gross margin exceeding expectations. TSMC further expanded its industry revenue share to a record high of 67% in Q4 2024, up from 64% in the previous quarter. The results were driven by high utilization at leading-edge nodes, particularly N3 and N5, fueled by AI accelerator demand and strong flagship smartphone sales. Despite the impact of smartphone seasonality in Q1 2025, AI-related demand is expected to offset this decline, as AI revenue is set to double in 2025. Beyond AI, non-AI semiconductor markets are showing early signs of recovery, supported by inventory normalization and a mild rebound in broader end markets. TSMC remains well-positioned to outperform the foundry industry, which is projected to grow 10% YoY in 2025. The company forecasts revenue growth of mid-20% YoY in 2025. Additionally, TSMC’s long-term growth outlook remains strong, with revenue expected to grow at a 20% CAGR from 2024 to 2029. Meanwhile, AI accelerator revenue is forecast to expand at a mid-40% CAGR over the same period. The company’s revenue guidance and AI accelerator revenue forecast for the 2024-2029 period are both significantly higher than market expectations.

Samsung Foundry’s revenue saw a slight sequential decline in Q4 2024 primarily due to weaker-than-expected demand for Android smartphones. The operating performance was hurt by lower utilization rates and higher R&D expenses, which were likely tied to advanced node engineering costs. Weak mobile demand further pressured revenue, contributing to a sequential drop in industry revenue share to 11% in Q4 2024 from 12% in Q3 2024. Despite near-term headwinds, Samsung Foundry is focused on long-term growth. It aims to increase AI and HPC product sales on advanced nodes to drive a YoY revenue rebound in 2025. The company is also enhancing its competitiveness across advanced nodes while progressing on 2nm GAA development, targeting mass production in 2025.

SMIC's Q4 2024 results were in line with expectations. The company’s solid revenue growth during the quarter was driven by ongoing demand recovery in consumer electronics and localization efforts in China. The company’s 12-inch wafer shipments continued to increase while 8-inch wafer shipments remained relatively weak due to early pull-in demand in H1 2024. Therefore, SMIC’s overall utilization rate decreased to 85.5% in Q4 2024 from 90.4% in the previous quarter, reflecting the ongoing capacity expansion and relatively weak utilization rate in 8-inch nodes during the quarter. Although SMIC’s strong Q1 2025 guidance reflects better-than-expected seasonal growth in smartphones and consumer electronics, supported by China’s consumption subsidies and pre-build demand ahead of US tariffs, the company is conservative on the ongoing momentum heading into Q2 2025 and H2 2025 due to a lack of strong demand drivers and industry oversupply.

UMC’s Q4 2024 results were largely in line with expectations, with steady wafer shipments supported by sporadic consumer electronics rush orders. However, pricing pressure and the impact of the January earthquake in Taiwan weighed on the company’s gross margins, leading to a softer-than-expected Q1 2025 outlook. While demand for consumer applications like Wi-Fi, TV, and display driver ICs showed early signs of recovery, management remains cautious, noting that broader market momentum is still lacking. UMC continues to see long-term opportunities in interposer technology, photonic ICs, and high-voltage processes for display applications, but these are unlikely to provide significant near-term revenue growth. The company expects low-single-digit YoY percentage growth for mature nodes in 2025 and will likely outperform the overall foundry market. However, a sustained recovery in utilization remains uncertain.

GlobalFoundries reported stable Q4 2024 results, with strong wafer shipments offsetting seasonal weakness in the smartphone segment. Automotive demand remained a key growth driver, surging on design win ramps, while communications infrastructure and datacenter revenue saw a solid boost, driven by increasing demand for optical transceivers, satellite communication, and AI inference chips. Home and industrial IoT also showed early signs of recovery, contributing to sequential revenue growth. Despite a weaker Q1 2025 outlook due to seasonal softness and ongoing macroeconomic headwinds, the company expects to see sustained quarterly revenue growth through 2025, supported by automotive momentum, expanding AI-related opportunities, and stabilizing trends in consumer-facing markets.

Commenting on the quarterly results, Research Analyst Adam Chang said, “The foundry industry’s strong Q4 2024 performance was largely driven by surging AI and flagship smartphone demand, which kept utilization rates high at leading-edge nodes, particularly TSMC’s N3 and N5/N4. AI and HPC applications continue to fuel the industry’s growth, reinforcing the need for advanced packaging solutions like CoWoS and SoIC. However, mature-node foundries, especially in the 8-inch segment, are facing persistent challenges due to weak demand in the auto and industrial sectors. Moving into 2025, the foundry industry’s growth is expected to remain strong. The sustainability of AI-driven growth at advanced nodes and broader stabilization across legacy process nodes are key trends to watch.”

Background

Counterpoint Technology Market Research is a global research firm specializing in products in the TMT (technology, media and telecom) industry. It services major technology and financial firms with a mix of monthly reports, customized projects and detailed analyses of the mobile and technology markets. Its key analysts are seasoned experts in the high-tech industry.