The wafer foundry industry's capacity utilization rate for the first quarter of 2024 is expected to recover to 75-76%
The average capacity utilization rate of major wafer fabs in the fourth quarter of 2023 was approximately 74%, representing a year-on-year decrease of about 16 percentage points. As inventory adjustments approach completion and downstream demands for AI, smartphones, and other end devices gradually recover, Sigmaintell predicts that the wafer foundry industry is expected to enter a period of recovery in 2024. It is projected that the capacity utilization rate of the wafer foundry industry in the first quarter of 2024 will likely recover to 75-76%, with stronger momentum in advanced processes compared to mature ones.
A detailed analysis is as follows:
12-inch (28/40nm) Wafers: Prices Remain Stable with Slight Decrease
Due to the various application demands in the consumer electronics, industrial control, Internet of Things, and new energy vehicle sectors, the utilization rate of the 28/40nm process technology remains at a high level. However, with the continuous introduction of new capacity in the 28/40nm process, there is still some price competition pressure among wafer fabs. According to Sigmaintell , it is expected that prices for 28/40nm foundry services will see a slight decrease in the first quarter.
12-inch (55/90nm) wafers: Narrowing Price Decline
The downstream applications of this part of the process wafer are mainly focused on consumer electronics. Additionally, due to the active expansion of IDM production in 2023-2024, there will be a certain impact on the utilization rate of the 55nm foundry capacity. Taiwanese foundries, on the other hand, are generally expected to lower prices in the first quarter of 2024 in order to boost capacity utilization. It is estimated that the price reduction in the first quarter of 2024 will be around 7-9%.
8-inch Wafers: Lack of Demand Recovery Momentum, Prices Yet to Stabilize
Due to the sluggish demand for downstream applications such as large-sized consumer electronics and analog chips, the order volume for 8-inch wafer foundries has been conservative. According to data from the collective intelligence consulting, the global average utilization rate of 8-inch wafer foundries is approximately 60% in the fourth quarter of 2023. Due to poor capacity utilization, current 8-inch wafer foundries are generally still reducing prices, and it is expected that prices will be reduced by around 10% on a quarterly basis in the first quarter of 2024.
（Sigmaintell is a professional research and advisory company with focusing on global high-tech industry.）
