In 2023, the global foundry industry is expected to have a significant drop in revenue, according to new estimates from DIGITIMES Research. The primary factor behind this decline is the reduced demand for chips amid the Ukraine war, global inflation, and geopolitical tensions.
DIGITIMES projects a 9.2% slide in global foundry industry revenue for 2023 due to the weakened demand for chips, with inventory adjustment in the first half of the year taking longer than anticipated. The weak demand is posing challenges for the global fabs revenue outlook, and the research highlights that although there is an AI-induced race boosting the High-Performance Computing (HPC) market, the overall foundry demand remains sluggish due to the slowing global economy.
The global electronics supply chain is expected to bounce back in the second half of 2023. However, there is still limited activation in terms of material preparation. While demand for consumer electronics products has been strong, driven by the remote work trend since the COVID-19 pandemic, shipments of smartphones, PCs, and notebooks declined last year, with only server demand seeing healthy growth from large data center operators.
To respond to the recession, chipmakers are seeking to reduce their 2023 CapEX and output, with the aforementioned product categories expected to see a continued decline in shipment volume.
In addition to the weak demand, chip suppliers are facing geopolitical challenges, particularly in the global semiconductor landscape, where Taiwan has captured over 60% of the global foundry market, surpassing countries like South Korea, China, and the United States. The Washington-Beijing tech battles have hit China's semiconductor ambitions, and the success of US-imposed sanctions depends on the forming alliances, especially Europe's intriguing stance.
All of these factors create significant shifts in the global semiconductor landscape that will continue to affect foundry industry. While the full impact is yet to be seen, it is clear that the industry will have to adapt to meet new challenges and seek new opportunities.
