According to the quarterly tracking report on wafer foundry by Counterpoint Research, the global wafer foundry industry's revenue increased by about 9% year-on-year and 23% quarter-on-quarter in the second quarter of 2024. The sequential growth was mainly driven by strong AI demand. CoWoS supply remains tight, and future capacity expansion focused on CoWoS-L may lead to potential growth. Although the demand for non-AI semiconductors, such as those used in autos and industrial applications, is recovering slowly, there have been urgent orders for certain applications, such as the Internet of Things and consumer electronics. It is worth noting that China's wafer foundry and semiconductor market has recovered faster compared to global peers. Chinese wafer foundry companies such as Semiconductor Manufacturing International Corporation (00981) and Hua Hong Semiconductor (01347) have reported strong quarterly performance and positive outlook as Chinese fabless semiconductor customers entered the inventory adjustment phase earlier and rebounded earlier than their global peers.

Taiwan Semiconductor (TSM.US) achieved moderate quarterly revenue growth in the second quarter of 2024, driven by sustained strong growth in AI accelerator demand. As a result, TSMC further raised its annual revenue guidance from low to mid-20% to mid-20%. In addition, TSMC expects the supply-demand balance for AI accelerators to remain tight by the end of 2025 or early 2026. The company also plans to at least double its CoWoS capacity by 2025 to meet strong customer demand for AI. Furthermore, Counterpoint Research continues to believe that there is a strong possibility of potential price increases for advanced nodes such as 3nm and 5/4nm in 2025, highlighting TSMC's leading technological position and bringing good prospects for the company's long-term profitability and the industry's sustained growth.

Samsung's sequential revenue growth in wafer foundry is mainly due to inventory pre-building and replenishment in the smart phone market, maintaining the second position with a 13% market share in the second quarter of 2024. The company continues to focus on winning more mobile and AI/high-performance computing customers for advanced nodes and expects its annual revenue growth to exceed industry growth.

Semiconductor Manufacturing International Corporation (SMIC) reported strong quarterly performance and provided stronger-than-expected guidance for the third quarter due to ongoing demand recovery in China, including CIS, PMIC, IoT, TDDI, and LDDIC applications. SMIC's 12-inch demand is improving, and the average selling price (ASP) is expected to increase as the range of inventory replenishment by Chinese fabless semiconductor customers expands. The company is cautiously optimistic about annual revenue growth and expects future utilization rates to rise healthily.

United Microelectronics Corporation (UMC.US) reported significantly better-than-expected quarterly performance, mainly attributed to favorable forex rates and strong pricing discipline, resulting in better profit margins. The company has guided mid-single-digit sequential growth for the third quarter of 2024 in line with expectations, with overall recovery in logic semiconductors being weaker except for AI. UMC focuses on strategic areas such as 22nm HV and 55nm RF SOI/BCD technologies, as well as reducing exposure to commercialized areas such as LDDIC and NOR flash, which is expected to support stable pricing and long-term growth.

Global wafer's quarterly performance is solid. Under the drive of new design wins, the company's auto business is growing sequentially in a challenging market. The company also sees inventory normalization in the smart phone market, as well as stable demand in the communication and internet of things markets. Global wafer's guidance indicates a moderate recovery in its overall business, consistent with the trends observed by other non-Chinese mature node wafer foundries (such as United Microelectronics).