The contract chipmakers revenue fell nearly 20 last quarter

The contract chipmaker’s revenue fell nearly 20% last quarter

TSMC has long been a global leader in semiconductor contract manufacturing services. It ended the first quarter of this year with a 60.1% share TrendForce, and its revenue declined just 16.2% sequentially, slightly less than the 18.6% industry-wide decline. Analysts explain this dynamic with the low demand for finished products and seasonal phenomena.

    Image source: Samsung Electronics

Image source: Samsung Electronics

Looking at revenue for the top 10 custom chipmakers, revenue for the most recent quarter has consistently declined by a total of $6.23 billion, although there were some interesting shifts in this segment of the market towards the end of the quarter. Notably, GlobalFoundries managed to overtake Taiwan’s UMC to take third place with 6.6% of the segment versus its peer’s 6.4%. GlobalFoundries’ revenue fell just 12.4% in the first quarter, while UMC lost a whopping 17.6%. This success is due to GlobalFoundries’ focus on customers in the automotive, defense and industrial automation sectors. UMC, on the other hand, reduced revenue from sales of 28/22nm and 40nm products by 20%, and utilization of 200mm silicon wafer processing lines will even drop below 60% in the second quarter.

Samsung holds second place with 12.4% of the market, but in the fourth quarter its share reached 15.8% and revenue fell 36.1% to $3.5 billion versus $16.7 billion at the same time Market leader versus Taiwanese TSMC. Significantly, Israel’s Tower Semiconductor ranked seventh in the first quarter, with revenue steadily declining 11.7% during the period and its market share rising from 1.2% to 1.3%. PSMC and VIS (Vanguard) were eighth and ninth, respectively.

    Image source: TrendForce

Image source: TrendForce

According to the authors of the study, TSMC continues to suffer from the low demand for components for PCs and smartphones, which are manufactured in technology standards from 7 to 4 nm inclusive. In these areas, the company’s sales fell by 17 to 20%. Demand could pick up slightly in the second quarter on rush orders related to the AI ​​boom, but TSMC’s revenue will likely continue to decline as production line utilization remains low, albeit at a slower pace than in the first quarter.

The reason for Samsung’s 36.1% drop in sales was lower utilization of production lines that use both 300mm and 200mm silicon wafers, according to analysts. New orders for 3nm products will help at least partially offset the ongoing negative trend in the second quarter.

China’s SMIC maintained fifth place after gaining $1.46 billion in the first quarter, down 9.8% from last year’s fourth-quarter results. According to TrendForce experts, against the background of the desire of the Chinese authorities to boost the development of the domestic electronics industry, the company has every opportunity to increase sales and business utilization rates.

According to the authors of the prognosis, the second quarter will not create any conditions for sales growth for the ten largest contract chip manufacturers. The capacity utilization of the production lines is also unlikely to increase noticeably; it can only be increased by periodic rush orders from certain product categories or customers.

About the author

Dylan Harris

Dylan Harris is fascinated by tests and reviews of computer hardware.

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