---
title: "In the second quarter, AI server demand remained strong, with a 9.6% quarterly increase in the output value of the world's top ten semiconductor foundries"
type: "News"
locale: "en"
url: "https://longbridge.com/en/news/213188738.md"
description: "In the second quarter, AI server demand remained strong, driving the quarterly output value of the world's top ten wafer foundries to increase by 9.6% to $32 billion. With the traditional stocking season in the third quarter approaching, it is expected that the output value will further increase. Market research indicates that the healthy levels of inventory during China's 618 shopping festival and at the end of terminals have promoted stocking, leading to a significant increase in wafer foundry capacity utilization. The top five foundry manufacturers are TSMC, Samsung, SMIC, UMC, and GlobalFoundries. TSMC achieved quarterly revenue of $20.82 billion due to demand from Apple and AI server HPC"
datetime: "2024-09-02T07:39:58.000Z"
locales:
  - [zh-CN](https://longbridge.com/zh-CN/news/213188738.md)
  - [en](https://longbridge.com/en/news/213188738.md)
  - [zh-HK](https://longbridge.com/zh-HK/news/213188738.md)
---

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# In the second quarter, AI server demand remained strong, with a 9.6% quarterly increase in the output value of the world's top ten semiconductor foundries

**Industry Insights**

According to the survey conducted by TrendForce, a global market research firm, the arrival of China's mid-year consumer season in the second quarter of 618, along with the return of consumer terminal inventories to healthy levels, has led customers to gradually initiate consumer component procurement or inventory replenishment, driving urgent orders to wafer foundries, significantly increasing capacity utilization rates, and showing a marked improvement compared to the previous quarter. **At the same time, the continued strong demand for AI servers has boosted the second quarter's global top ten wafer foundry production value by 9.6% to $32 billion**.

In terms of rankings, the top five wafer foundry manufacturers remained unchanged in the second quarter, namely TSMC (Taiwan Semiconductor Manufacturing Company), Samsung, SMIC (Semiconductor Manufacturing International Corporation), UMC (United Microelectronics Corporation), and GlobalFoundries. In the sixth to tenth positions, VIS benefited from urgent orders for DDI (display driver chips) and the dividend-driven growth of PMIC (power management chips), rising to eighth place; PSMC, Nexchip, on the other hand, fell to ninth and tenth place respectively. The rankings are as follows: HuaHong Group, Tower, VIS, PSMC, and Nexchip.

**Taiwan Semiconductor Manufacturing Company (TSMC)**

Due to Apple entering a procurement cycle and the growth in demand for AI servers related to HPC (high-performance computing), TSMC's wafer shipments increased by 3.1% in the second quarter, and revenue increased by 10.5% to $20.82 billion, with a market share of 62.3%.

**Samsung**

In the second quarter, Samsung's wafer foundry business saw revenue growth of 14.2% driven by Apple's new iPhone procurement and demand for ICs such as Qualcomm's 5/4nm 5G modem, 28/22nm OLED DDI, reaching $3.83 billion, maintaining a stable market share of 11.5% and ranking second.

**Semiconductor Manufacturing International Corporation (SMIC)**

SMIC benefited from the sales season of China's 618, with strong demand for consumer terminal peripheral ICs, wafer shipments in the second quarter increased by 17.7%, revenue increased by 8.6% to $1.9 billion, with a market share of 5.7%, ranking third.

**United Microelectronics Corporation (UMC)**

UMC also received support from some urgent orders during the mid-year consumer season in the second quarter, particularly for TV-related ICs, as well as the drive for low-end MCUs (microcontrollers) required for consumer electronics, resulting in a slight increase in wafer shipments by 2.6%, revenue growth of 1.1% to $1.76 billion, with a market share of 5.3%, ranking fourth **GlobalFoundries**

GlobalFoundries' wafer shipments in the second quarter improved compared to the previous quarter, with revenue increasing slightly by 5.4% to reach 1.63 billion RMB, and a market share of 4.9%, ranking fifth.

**HuaHong Group**

HuaHong Group was affected by the rush orders during the mid-year promotion season, leading to increased capacity utilization and shipment performance compared to the previous quarter. Revenue increased by 5.1% to reach 710 million USD, with a market share of 2.1%, ranking sixth.

**Tower Semiconductor**

Tower Semiconductor benefited from improvements in total wafer shipments and product portfolio in the second quarter. Revenue increased by 7.3% to reach 350 million USD, with a market share of 1.1%, ranking seventh.

**VIS**

VIS saw a significant improvement in capacity utilization in the second quarter, driven by rush orders during the 618 shopping festival and increased PMIC customers. Wafer shipments increased by 19%, with revenue growing by 11.6% to reach 340 million USD, capturing a market share of 1% and surpassing PSMC and Nexchip to rank eighth.

**PSMC**

PSMC's memory business continued to recover, while there was no significant improvement in logic chip foundry in the second quarter. Revenue increased slightly by 1.2% to reach 320 million USD, with a market share of 1%, ranking ninth.

**Hefei Jinghe (Nexchip)**

Nexchip recorded revenue of 300 million USD in the second quarter, a slight decrease of about 3.2% compared to the previous quarter, with a market share of 0.9%, ranking tenth.

It is worth noting that in the third quarter of 2023, Intel Foundry Service (IFS) briefly ranked ninth in the foundry ranking. However, with a redefinition of IFS revenue starting from the first quarter of this year, revenue for the first and second quarters reached 4.4 billion USD and 4.3 billion USD respectively. The operating profit margin was at a loss of 57% and 66% for the two quarters, as about 98-99% of revenue comes from internal sources, with only about 1% from external customers (sales of equipment materials and packaging and testing services). If evaluating revenue solely from external customers, IFS has not yet entered the top ten in wafer foundry rankings.

TrendForce noted that as the third quarter enters the traditional peak season for stocking up, despite the unclear global economic situation affecting consumer confidence, the release of new smartphones and PC/NB products in the second half of the year is expected to drive demand for main chips (SoC) and peripheral ICs to a certain extent. Additionally, with AI servers and related HPC experiencing rapid growth, the demand is expected to continue until the end of the year, with some advanced process orders extending into 2025, becoming a key driver supporting the growth of production value in 2024 TrendForce expects that due to the improvement in capacity utilization of advanced and mature processes in the third quarter compared to the previous quarter, the global top ten wafer foundry output is expected to further increase, with a growth rate that is expected to be on par with the second quarter.

TrendForce, original title: "Research Report | Second-quarter supply chain rush orders boost wafer foundry utilization rate, global top ten wafer foundry output increases by 9.6% quarterly"

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