It is understood that in 2024, due to the slowdown of the growth rate of world economic development and the interference of comprehensive factors such as the destocking of machine manufacturers, the global semiconductor industry is generally in a downward trend. As one of the key products in the semiconductor industry, the development trend of the integrated circuit field has attracted much attention.
An integrated circuit is a tiny electronic device or component. Abbreviated as IC; Using a certain process, the transistors, resistors, capacitors and inductors required in a circuit and wiring are interconnected together, made on a small or several small pieces of semiconductor chips or dielectric substrates, and then packaged in a tube shell to become a miniature structure with the required circuit functions; It is one of the core factors for the development of electronic components towards microminiaturization, low power consumption, intelligence and high reliability.
According to Gartner, global semiconductor revenue in 2024 totaled $418.3 billion, down 11.9% from 2018. From the domestic situation, affected by the decline of the global semiconductor market, China's integrated circuit industry growth rate in 2024 also showed a significant decline, according to the statistics of the China Semiconductor Industry Association, from January to September 2024, China's integrated circuit industry sales of 504.99 billion yuan, an increase of 13.2%, the growth rate decreased by 9.2 percentage points.
According to the database of China Business Industry Research Institute, the export volume of China's integrated circuits has increased in January-February 2024, and the export volume of China's integrated circuits in January-February 2024 was 32.72 billion, an increase of 13.6%.
Giant companies across the semiconductor field
In 2024, Shenzhen Baoan Bay Tencent Cloud Computing Co., Ltd. was formally established with a registered capital of 20 million yuan. It is wholly owned by Tencent Cloud Computing (Beijing) Co., LTD., the operating body of Tencent Cloud, and the legal representative is Wang Jingtian, vice president of Tencent Cloud. It is worth noting that the data show that the company's business scope in addition to computer technology services and information services; Research and development of big data processing technology; In addition to application software development, it also includes integrated circuit design, research and development.
In fact, at present, it is not uncommon for enterprises to enter the semiconductor field across the border, such as Konka, Gree and other well-known home appliance enterprises; Smartphone makers such as Xiaomi and Huawei; In the field of BAT, Baidu and Ali are also major generals in cross-border "core" enterprises.
Integrated circuit industry chain into the "economic weapon" of each city
At the end of February 2024, at the signing ceremony of major industrial project concentration (cloud) in Hefei, Anhui province, GCL integrated regenerative wafer project, with a total investment of 5 billion yuan and an annual output of 3.6 million pieces, officially settled in Feidong Robot Industry Town. It is reported that the entry of this project to fill the gap in domestic independent recycled wafer mass production will drive the development of upstream and downstream enterprises in Feidong and Anhui industry, promote Feidong to become the largest recycled wafer production base in China, and help Anhui to build a trillion-class integrated circuit industrial cluster.
On March 12, eight key integrated circuit projects with a total investment of 13 billion yuan started in Chengdu High-tech Zone, Sichuan Province, and the IC design industry headquarters base started construction, according to officials, the total investment of the project is about 1.314 billion yuan, which is planned to be completed in December 2022, and will take the construction of IC design industry ecosystem as a strategy. Focusing on 5G, microwave, Internet of Things, power semiconductor, MEMS, IP, artificial intelligence and other characteristic areas, will link the University of Electronic Science and Technology, cooperate with surrounding sealing, manufacturing and other supporting industries, to build a "core valley" in western China, become the IC industry "demonstration zone".
On March 18, HYcore China headquarters and integrated circuit R&D and production base project started in Nansha, Guangzhou. The project is expected to be completed after the completion of the production of power devices, MOSFET, IGBT, digital analog hybrid, MEMS, microcontroller and other products, the production year will form an annual output of 8 inch chip 420,000 pieces, 12 inch chip 80,000 pieces of production capacity.
It can be seen that in the era of Internet of Things information technology, having a complete industrial supply chain of integrated circuits and core technologies with characteristics will be the key point for the economic development and competitiveness of provinces and regions in the future.
Analysis of the development trend of global and Chinese semiconductor equipment industry pattern in 2024
First, the global semiconductor equipment industry began to recover
North American semiconductor equipment manufacturers North American semiconductor equipment manufacturers 20 January shipments high year-on-year growth month shipments high year-on-year growth. In January 2024, North American semiconductor equipment manufacturers shipped $2.045 billion, an increase of 22.9%. Since May 2024, the decline in shipments by North American semiconductor equipment manufacturers has gradually narrowed and gradually turned positive. At present, the growth rate has continued to rise for four consecutive months, and the growth rate has increased significantly, and the absolute value of shipments in January this year is the second-highest level of shipments in January over the years (the highest is 2.37 billion yuan in January 2018). The global semiconductor equipment industry is experiencing a recovery.
The global semiconductor equipment market is expected to be $57.6 billion in 2024, down 10.5% year on year; Growth is expected to return to $60.8 billion in 2024, up 5.5% year-on-year;
Global semiconductor sales are expected to be $409 billion in 2024, down 12.8% year on year. Memory sales of $105.9 billion, down 33%; Analog semiconductor sales of $54.1 billion, down 7.9% year-over-year; Microprocessors $65.7 billion, down 2.3%; Logic components were $104.6 billion, down 4.3% year-over-year. Optimistic about the development of the global semiconductor market in 2024. Semiconductor growth is expected to gradually resume in 2024, with global sales increasing by 5.9% to $433 billion.
Due to the official entry of 5G into the commercial phase, coupled with the recovery of data center related investment and the upcoming launch of a new generation of game consoles, the semiconductor market growth rate is expected to turn negative to positive in 2024, including analog semiconductors, microprocessors, sensors, chips, memory and other products, are expected to usher in positive growth again.
From the perspective of the investment structure of the global semiconductor industry, the active investment of logic wafer manufacturers (including IDM manufacturers and wafer foundries) is the main driving force for this round of global semiconductor equipment industry to enter a new round of growth, while memory investment is slow to start.
Due to 5G, high efficiency computing (HPC) and other advanced logic process market demand, medium - and long-term growth momentum is sufficient, 2024 including TSMC, Intel, Samsung foundry and other capital expenditures have hit a new high, and remain optimistic about capital spending in the next few years.
Due to the sharp decline in memory prices from 2018 to 2024, major manufacturers including Micron and SK Hynix have cut capital expenditures in 2024.
Overseas semiconductor equipment giants ushered in an upward inflection point in performance, mainly driven by logic customer demand, while memory customer demand has stabilized. 24Q4 revenue, including ASML, Ketian Semiconductor, Teredad, Tokyo Electronics, etc., achieved positive sequential and year-on-year growth, while gross margin ushered in a rebound. Overall, the growth in demand is driven by logic customers, and memory customer revenues are still declining. However, in the case of lithography machines at the front end of the device chain, the demand for memory customers has stabilized.
Kolei 2024Q4 achieved revenue of $1.509 billion, an increase of 35%(4 consecutive quarters of upward growth); Non-GAAP net income increased by 13% to RMB422 million. In terms of revenue segments, Foundry grew strongly, while Memory remained in negative territory. Semiconductor Process Control(SPC, 83% of total revenue) accounted for 40% of Memory (YOY-25%, 5 consecutive quarters of negative growth), Foundry accounted for 52%(YoY+148%), and Logic accounted for 8%(YOY-39%).
Tokyo Electronics 2024Q4 achieved revenue of about 295.4 billion yen (YoY +10%), gross profit margin of 39.8%, net profit of 49.3 billion yen (YoY +1%), while the year-on-year growth rate of revenue and profit reversed the negative growth trend of the first three quarters to negative positive. By downstream segment (only for SPE, FPD revenue is not classified), DRAM equipment accounted for 13%(YOY-21%), Non-volatile Memory equipment accounted for 14%(YOY-45%), Foundry equipment accounted for 24%(YoY +270%), and non-volatile memory equipment accounted for 13%(YOY-45%). MPU/AP devices accounted for 25%(YoY +140%).
Second, the domestic status quo and pattern
According to the "2024-2026 China Semiconductor Equipment Industry Development Status Survey and Investment development Potential Report" released by Zhiyan Consulting, the installed capacity of China's 12-inch wafer manufacturing plant by the end of 2024 is about 900,000 pieces, an increase of 50% compared with 2018; The 8-inch wafer manufacturing plant has an installed capacity of approximately 1 million wafers, an increase of 10% from 2018; The 6-inch wafer fabrication plant has an installed capacity of approximately 2.3 million wafers, an increase of 15% from 2018; The installed capacity of the 5-inch wafer manufacturing plant is approximately 800,000 wafers, down 11% from 2018; The 4-inch wafer manufacturing plant has an installed capacity of approximately 2.6 million wafers, an increase of 30% from 2018; The installed capacity of the 3-inch wafer manufacturing plant is about 400,000 wafers, down 20% from 2018.
The domestic semiconductor equipment industry will fully benefit from the double investment intensity of logic plants and memory plants.
Wafer foundry. Foundry model is the core of the "service", wafer foundries usually provide a process technology platform, according to customer needs to provide customized products and services, the key to the development and growth is to cover more customers, to meet the needs of more customers, so the expansion of wafer foundries is also to match customer needs, usually in line with the development trend of market demand. When market demand is high, aggressive capital expenditure to meet increasing downstream demand is also the driving force for future growth of the company. For customer demand, there are two main types of fab capacity expansion scenarios: (1) capacity demand. That is, the existing production capacity is fully utilized, and the production capacity is expanded to match the capacity needs of customers. (2) Process requirements. That is to meet more customer needs or expand customer coverage, process upgrades and new capacity.
The positive change in the industry since 2024 is that the industry boom continues to rise, and the capacity utilization rate of wafer foundries continues to increase, prompting foundries to actively plan capital expenditure. Taking SMIC as an example, according to the company's quarterly report, SMIC 24Q4 capacity utilization has further improved to 98.8%, and the company plans to spend $3.1 billion in 2024 capital expenditure, a significant increase from $2 billion in 2024.
The memory factory. Unlike foundries, memory plants use the IDM model to supply semiconductor products directly. Due to the high degree of standardization of memory chip technology, the product capacity and packaging form of various manufacturers follow the standard interface, and the performance is not much different. In the case of homogeneous competition, storage manufacturers improve the manufacturing process, provide manufacturing capacity, and reduce costs by using scale advantages, so as to win the market. In order to improve competitiveness and seize market share, memory factories may take counter-market expansion strategies.
At present, China's memory industry is facing major opportunities, prompting domestic memory manufacturers to actively carry out process research and development and capacity construction, long-term and large-scale downstream investment will create an excellent growth environment for domestic equipment. Among them, Yangtze River Storage and Hefei Changxin will enter a positive production capacity climbing period in 2024, which is expected to promote a substantial increase in equipment demand. 24 Q4 Yangtze River storage capacity of 20,000 pieces/month (12 inches), the end of 25 is expected to expand to 70,000 pieces/month; Hefei Changxin currently has a production capacity of 20,000 pieces/month and is expected to reach 40,000 pieces/month by the end of the first quarter of 2024.
In 2024, the global semiconductor industry (excluding memory) revenue declined by 3%, the wafer foundry industry revenue was flat, and the company's full-year revenue (in US dollars) increased by 1.3%, exceeding the overall level of the industry. Looking ahead to 2024, the company expects global semiconductor industry (excluding memory) revenue growth of 8% and foundry industry revenue growth of 17%, and the company is confident that the growth rate will exceed the industry as a whole. Driven by 5G and HPC, the company expects its future revenue compound growth rate is expected to be near the upper end of the original 5% to 10% target.
TSMC's revenue growth cycle is roughly about 2 years, and the orders with the revenue growth rate in each cycle usually correspond to the advanced process revenue at that time accounting for 40% to 50% of the level. 5G and HPC chips need to handle large amounts of data transmission and computing, and their power consumption is greatly increased, so they need to use advanced manufacturing processes such as 7 nm or 5 nm. With the continuous promotion of 5G commercial use, starting from the fourth quarter of 2024, the demand for wafer foundry of base stations and smartphone chips has increased strongly, and the demand for big data analysis brought by 5G has also increased the wafer foundry orders of HPC chips.
In the 24Q4 semiconductor wafer revenue, 7nm revenue accounted for 35%, 10nm accounted for 1%, 16nm accounted for 20%, and advanced process revenue accounted for 56%, which continued to increase significantly compared with 51% in Q3. According to TSMC 24Q4 performance report, the company is expected to achieve 5nm mass production in the first half of 2024, the second half of the demand for mobile terminals and HPC will be rapid expansion, and 5nm is expected to contribute 10% of wafer revenue in 2024.
As the global foundry industry leader, TSMC's capital expenditure plan is often in line with downstream demand, when downstream demand is strong, it will significantly increase capital expenditure, including capacity and advanced processes to meet the growing downstream demand.
Based on the judgment that 5G and HPC continue to have a strong demand for advanced processes in the future, TSMC revised its annual capital expenditure guidance for 2024 from $1 to $1.1 billion to $1.4 to $1.5 billion at the Q3 law meeting, and Q4 invested $5.6 billion in capital expenditure, and the annual capital expenditure for 2024 reached $14.9 billion close to the guidance limit. Looking ahead to 2024, the company plans capital expenditures in the range of $15 to $16 billion, of which 80% will be invested in 7nm and below advanced processes.
Due to the continuous penetration of TWS, multi-camera, ultra-thin Fingerprint recognition and other products, SMIC's downstream demand for CIS, Power IC, Fingerprint IC, Bluetooth IC and Specialty Memory products remains strong, the industry boom continues to rise, and the company's capacity utilization continues to improve.
2024Q4 The company's capacity utilization rate reached 98.8%, which is already the highest level since 2016, continuing to increase by 1.8 percentage points from the previous quarter and 8.9 percentage points from the same period last year. Smic achieved operating income of $839 million, an increase of 6.6%, ending three consecutive quarters of continuous decline; 2024Q4 The company's gross profit margin was 23.8%, an increase of 3.0 percentage points over the previous quarter and an increase of 6 percentage points over the same period last year
