Jibang Consulting: With AI layout and supply chain inventory improvement, the output value of wafer foundry will increase by 20% annually by 2025

According to the latest survey by TrendForce, in 2024, due to the weakness of the consumer product terminal market and the conservative stocking of component manufacturers, the average capacity utilization rate of wafer foundries is less than 80%. Only advanced processes such as 5/4/3nm used in HPC (High-Performance Computing) products and mainstream flagship smartphones are operating at full capacity. In contrast, although visibility in the consumer terminal market remains low in 2025, inventories in the automotive and industrial control supply chains have gradually bottomed out since the second half of 2024. In 2025, sporadic stocking will resume, coupled with the increase in wafer consumption of individual whole machines driven by Edge AI (Edge Artificial Intelligence) and the continuous deployment of Cloud AI. It is estimated that the wafer foundry output value in 2025 will increase by 20% annually, surpassing the 16% growth in 2024. Analyzing the performance of various wafer foundries, advanced processes and advanced packaging will drive TSMC's revenue growth rate in 2025 to exceed the industry average. Although the growth momentum of non-TSMC wafer foundries is still suppressed by demand from consumer terminals, factors such as healthy component inventories of IDM and Fabless customers, the demand for power from Cloud/Edge AI, and a lower base in 2024 are expected to result in a revenue growth rate close to 12% in 2025, surpassing the previous year. In 2025, advanced processes will maintain high growth momentum, and the importance of advanced packaging will increase daily TrendForce pointed out that in the past two years, the capacity of the 3nm process has entered an upward phase, and 2025 will also become the mainstream for flagship PC CPUs and mobile APs, with the largest revenue growth space. In addition, as mid-to-high-end and mid-range smartphone chips and AI GPUs and ASICs are still at 5/4nm processes, the utilization rate of 5/4nm capacity remains high. With the restart of RF/WiFi processes for smartphones in the second half of 2025 to 2026, 7/6nm processes are expected to see new demand. TrendForce estimates that in 2025, 7/6nm, 5/4nm, and 3nm processes will contribute to 45% of global wafer foundry revenue. Furthermore, driven by the large demand for AI chips, the supply shortage of 2.5D advanced packaging was evident from 2023 to 2024. Major manufacturers such as TSMC, Samsung, and Intel, which provide a complete solution from front-end manufacturing to back-end packaging, are actively constructing capacity. TrendForce estimates that the revenue from 2.5D packaging provided by wafer foundries in 2025 will increase by over 120% annually. Although it accounts for less than 5% of overall wafer foundry revenue, its importance is increasing day by day Mature Process Capacity Utilization to Increase by 10 Percentage Points, but Ongoing Expansion Puts Pressure on Outsourcing Prices TrendForce stated that in 2025, due to the low visibility of consumer product demand and cautious inventory attitudes in the supply chain, orders for wafer foundry will follow a sporadic urgent order pattern similar to 2024. However, inventories of components for applications such as automobiles, industrial control, and general-purpose servers have gradually adjusted to a healthy level in 2024 and will move into sporadic inventory replenishment in 2025. As a result, the utilization rate of mature process capacity is expected to increase by 10 percentage points, surpassing 70%. Nevertheless, after wafer fabs adjusted their expansion plans for two consecutive years due to slowing demand, it is expected that they will gradually start up the previously slowed new capacity in 2025, especially focusing on 28nm, 40nm, and 55nm nodes. Under the impact of low demand visibility and the launch of new capacity, prices for mature processes may continue to face downward pressure. Supported by the continuous drive of AI and the bottoming out of inventories for various application components, the revenue growth of the wafer foundry industry in 2025 is expected to return to a 20% level. However, manufacturers still need to face many challenges, including the global economic impact on end consumer demand, whether high costs will affect AI deployment momentum, and the increase in capital expenditure due to expansion