Can the prolonged downward adjustment in the global semiconductor market come to an end? What changes will the global semiconductor industry usher in? The anticipation is here.

Prediction 1: The market will meet the cyclical recovery

Recently, a number of industry associations and market analysis institutions have made a positive judgment that the global semiconductor market will pick up in 2024.

On February 6, the Semiconductor Industry Association (SIA) announced that the global semiconductor industry sales in the fourth quarter of 2023 were $146 billion, an increase of 11.6% year-on-year and an increase of 8.4% quarter-on-quarter. "Global semiconductor sales were sluggish at the beginning of 2023, but rebounded strongly in the second half of the year and the market is expected to achieve double-digit growth in 2024," said SIA President and CEO John Neuffer. SIA forecasts that global semiconductor industry sales will grow by 13.1% in 2024.

According to the World Association for Semiconductor Trade Statistics (WSTS), the global semiconductor industry grew by 6% year-on-year in the fourth quarter of 2023. Market research firm Market.us has made an outlook for the semiconductor industry in the next 10 years and is generally more positive and optimistic. The agency believes that the global semiconductor market is expected to achieve substantial growth, and the rebound in 2024 is only an "appetizer", and the total market size will reach $673.1 billion for the year. Global sales are expected to grow at a compound annual growth rate of 8.8% from 2023 to 2032, and the global semiconductor market is expected to reach $1,307.7 billion by 2032.

On January 18, TSMC CEO Wei Zhe Jia said in the fourth quarter of 2023 TSMC earnings call that it is forecast that the overall semiconductor market excluding memory will grow by more than 10% in the whole year of 2024, and the growth rate of the foundry industry is expected to be about 20%.

Industry expert Great Kang said in an interview with China Electronics News that the semiconductor market will usher in a cyclical recovery in 2024, but the degree of recovery is still unknown. For the future market outlook, should not be too optimistic, should not be too pessimistic. Instead, people should see the current challenges as a motivation to actively respond and move the industry forward.

Prediction 2: Consumer electronics and data centers boost advanced processes "increasingly high"

High-performance clusters such as smartphones and data centers are two major application scenarios for advanced manufacturing processes.

Recently, market research agency Counterpoint data show that in the fourth quarter of 2023, smartphone shipments increased by 3% year-on-year to reach 312 million units, showing a recovery trend. Counterpoint estimates that global smartphone shipments are expected to grow 3% year-on-year in 2024.

According to TSMC's fourth quarter 2023 financial report, revenue contributed by high performance computing (HPC) increased by 17% sequentially and accounted for 43% of total revenue in the fourth quarter. Huang said high-performance computing platforms will be the biggest driver of growth in 2024.

Based on this market demand, 3nm and more advanced processes have become an important area of competition for major foundry companies.

Wei said that almost all smartphone and high-performance computing companies are working with TSMC to develop 3nm technology. Its 3nm has successfully entered the mass production phase and achieved strong growth in the second half of 2023, with its sales volume being much larger than the first half. TSMC Chief Financial Officer Huang Renzhao said at the fourth quarter 2023 earnings briefing that part of the 3nm capacity can be supported by 5nm tools, which means that TSMC's 3nm capacity supply capacity will be improved. In 2024, TSMC's 3nm revenue contribution will also be higher than in 2023.

At the same time, TSMC said that the development of its 2nm technology is progressing smoothly, and the device performance and yield may exceed the plan. N2 will reach mass production in 2025.

In its fiscal fourth quarter 2023 report, Samsung Electronics noted that its GAA architecture development for 3nm and 2nm processes is progressing smoothly, and recently received an order for a 2nm artificial intelligence accelerator project.

Intel won four 18A foundry customers in 2023, and its foundry business has more than 50 test chips ready between 2024 and 2025, 75 percent of which will be Intel 18A.

Prediction 3: The end-to-end spread of artificial intelligence drives the continuous surge of Gpus

Zhao Chuanyu, vice president of sales at ADI China, said in an interview with China Electronics News that artificial intelligence is developing at a very fast pace to the edge, thanks to the emergence of new applications such as automatic driving and automated factories, people's attention is turning to high efficiency, real-time decision-making and safer and more reliable operation, and then driving data processing and intelligence from the cloud to the edge. The trend has also spread to various industries. Reduce latency, reduce bandwidth requirements, improve data security, and leverage ubiquitous detection and AI-driven edge computing to close the distance between computing, data storage, and data sources in real time so that data can be transformed into insight, understanding, and action, which can help customers accelerate digital transformation. And have a positive impact on human and environmental protection.

2024 is regarded as the first year of AI PC, and global AI PC shipments are expected to reach about 13 million units. Dell'Oro research reports that GPU production will continue to surge 70% year over year in 2024.

Prediction 4: The sealed test industry will return to cold in 2024

The packaging market hit a trough in 2023, but this phenomenon will improve in 2024. Zheng Li, CEO of Changdian Technology, told China Electronics News that the closed test industry will "return to the cold" in 2024, and will usher in a more obvious market rise in 2025 or 2026.

Zheng Li believes that the recovery of the closed test market is mainly driven by three factors. The first is the recovery of consumer electronics and the boost of the storage market. Zheng Li said that with the expansion of data centers and the popularity of cloud computing, the storage market has shown substantial growth and will become the "driver" of the recovery of the closed test industry.

The second is the looming post-Moore era. Zheng Li believes that as the chip manufacturing process approaches the physical limit, the chip industry needs sealing technology to carry the banner of performance improvement in the future. This promotes the market demand for sealed test, but also puts forward requirements for the diversification of packaging technology.

Finally, the emergence of emerging markets has also injected new vitality into the closed test market. Zheng Li believes that the development of green energy industries such as new energy vehicles and photovoltaic power generation provides a good opportunity for the application of wide-band gap semiconductor power devices. To ensure the stable and reliable performance of wide band gap semiconductor devices, advanced packaging technology is indispensable. Zheng Li predicted that in 2024, JCET's revenue in the field of wide-gap semiconductors will double.