Milestone!
According to the latest data from Counterpoint Research, according to the revenue in the first quarter, the global market share of SMIC, the "chip leader" in mainland China, rose to 6%, surpassing GlobalFoundries and Lianhua Electronics for the first time, and became the third largest chip foundry enterprise in the world, second only to TSMC and Samsung Electronics.
From the perspective of revenue by region, in the first quarter of 2024, SMIC's business from China accounted for 81.6%. Benefiting from the recovery of domestic demand, SMIC's quarterly performance exceeded market expectations. It is worth noting that China's IC import has begun to show a downward trend. According to the official website data of the General Administration of Customs, China's cumulative import of IC in 2023 will decline by 10.8% year on year, and the import amount will decline by 15.4% year on year. What is reflected behind the figures is that China's local chip industry chain is growing rapidly, and the market share is also increasing.
Seen from the global market, the semiconductor industry has shown signs of demand recovery. TSMC recently predicted that the annual revenue growth of the global semiconductor industry (excluding memory chips) will reach 10%. The World Semiconductor Trade Statistics Organization (WSTS) also predicts that the global semiconductor market will grow by 13.1% year on year in 2024.
milepost
According to the latest data from Counterpoint Research, according to the revenue in the first quarter, SMIC International, the "chip brother" in mainland China, surpassed GlobalFoundries and Lianhua Electronics for the first time, and became the world's third largest chip OEM enterprise.
According to the report, in the first quarter of this year, SMIC International's market share in the world was 6%, higher than 5% in 2023, surpassing Geochip and Lianhua Electronics and becoming the world's third largest chip foundry.
At present, SMIC International's market share is only second to TSMC and Samsung Electronics.
Among them, TSMC's performance in the first quarter was better than the market expectation, with a market share of up to 62%, firmly holding the "hegemonic position" of global chip foundry. At the same time, TSMC extended the guideline of 50% CAGR of AI revenue to 2028, reflecting the continued strong demand for AI.
Samsung Electronics' revenue from chip OEM declined, mainly due to the seasonal factors of smart phones, ranking second in the world with 13% market share. The company expects to achieve double-digit growth in revenue as demand picks up in the second quarter.
Counterpoint Research released a report that said: "SMIC's quarterly performance exceeded market expectations. As China's demand for applications of CMOS image sensors (CIS), power management IC (PMIC), Internet of Things chips and display driver IC (DDIC) began to recover, SMIC's market share of OEM revenue in the first quarter of 2024 remained the third largest for the first time."
In fact, strictly speaking, Samsung Electronics is not a pure wafer foundry. Therefore, from the first quarter's revenue ranking, SMIC International is the world's second largest pure wafer foundry after TSMC.
Wang Ruchen, a senior analyst who has long followed SMIC International, said that although the gross profit margin and net profit could not be compared with those of Unicom and Geochip, it was still very meaningful. Even though the ranking may change in the coming quarters or even longer, SMIC International's position in the industry will be further improved and its voice will continue to be strengthened.
Chips produced by SMIC International are widely used in automobile, smart phone, computer, Internet of Things technology and other fields. Benefiting from the recovery of domestic application demand, SMIC's performance in the first quarter exceeded market expectations.
According to the financial report, SMIC International's revenue in the first quarter of this year was 12.594 billion yuan, up 19.7% year on year and 4.3% month on month, the second highest record in the same period in history (only lower than the 1.842 billion dollars in the first quarter of 2022).
The company said in its financial report that the reason for the rapid growth of revenue was that customers hoarded chips. Due to the strong demand, SMIC International expects that its revenue in the second quarter will increase by 5% to 7% compared with the first quarter.
Counterpoint Research also said in the report that with the expansion of the trend of inventory replenishment, SMIC International is expected to continue to grow in the second quarter. Compared with the single digit growth guidance given in the last financial report conference call, SMIC International may grow by about 15% in 2024.
More than 80% of the revenue comes from the Chinese market
In terms of regional classification of SMIC's main revenue, in the first quarter of 2024, its business from China, the United States and Eurasia accounted for 81.6%, 14.9% and 3.5% respectively. This means that more than four fifths of SMIC's revenue comes from the Chinese market.
China has become one of the world's major chip consumers. According to data from Omdia, a technology consulting company, China consumes nearly 50% of the world's semiconductors, making it the world's largest consumer electronics assembly market.
In addition, according to the data of China Semiconductor Industry Association, the scale of China's chip market in 2022 will be 1129.8 billion yuan, with a year-on-year growth of 8.03%. It is expected that China's chip sales will reach 1442.6 billion yuan in 2024.
Therefore, China's demand for chip imports is very large. According to the data of the General Administration of Customs, China's chip import amount in 2022 will reach 2.77 trillion yuan, accounting for 15.3% of China's total import amount in 2022.
It is worth noting that China's IC import has begun to show a downward trend. According to the official website data of the General Administration of Customs, China's cumulative import of IC in 2023 will decline by 10.8% year on year, and the import amount will decline by 15.4% year on year. What is reflected behind the figures is that China's local chip industry chain is beginning to grow rapidly, and the market share is also increasing.
The global chip industry is recovering
From the perspective of the global market, Counterpoint Research believes that the semiconductor industry has shown signs of demand recovery in the first quarter of 2024. Although this progress is relatively slow, channel inventory has normalized after several consecutive quarters of de stocking.
At the same time, the agency believes that the strong demand for AI and the recovery of demand for end products will become the main growth force of the wafer foundry industry in 2024. In addition, in the first quarter of this year, the revenue of the global OEM industry decreased by about 5% month on month, but increased by 12% year on year.
In addition, the latest signal released by TSMC also indicates that the global semiconductor industry will recover in 2024. Benefiting from the recovery of consumer electronics, AI demand continued to grow. TSMC's sales in April reached 236 billion New Taiwan Dollars, up 20.9% month on month and 59.6% year on year.
On May 23, TSMC predicted that the annual revenue growth of the global semiconductor industry (excluding memory chips) would reach 10%.
Cliff Hou, senior vice president of TSMC, said at an event that this is a new opportunity and a golden age of AI. Due to the surge in demand for AI chips, the company's sales in the second quarter are expected to grow by 30%.
The World Semiconductor Trade Statistics Organization (WSTS) also predicts that the global semiconductor market will grow by 13.1% year on year in 2024.
Nomura believes that if the cyclical technology recovery expands to other electronic terminal markets, it will support semiconductor to enter the next round of rising cycle, from the second half of this year to 2025. Driven by AI demand, the cyclical recovery of the terminal market will expand from AI servers to other major computing fields such as traditional servers, personal computers and smart phones.
Editor in charge: Tactical Constant
Checked by: Su Huanwen
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