20231123-招银国际-Global_foundry_3Q23_Wrap__consumer_smartphone_PC_recovery__upcycle_and_growth_in_2024_5页_1007kb

The report analyzes the global foundry industry for the third quarter of 2023 and fourth quarter outlook, as well as 2024 expectations. Key points include:

• Third Quarter Performance: Most major foundries (TSMC, UMC, VIS, SMIC, Globalfoundries, Hua Hong Semi) reported revenue growth on a quarter-over-quarter basis, driven by smart phone and PC demand, but faced pressure from lower average selling prices (ASP) and gross profit margin (GPM) due to weak demand and cost factors.

• Fourth Quarter Outlook: Guidance is mixed; TSMC expects stable growth with higher costs at advanced nodes, UMC/SMIC/Hua Hong forecast revenue declines from shipment/ASP pressure. Overall, foundries face shipment and pricing challenges.

• 2024 Prospects: The industry expects growth driven by consumer/smartphone/PC recovery despite automotive inventory correction. Global foundry industry is projected to return to positive growth in the first half of 2024.

• Capacity and CapEx: Overseas foundries maintain conservative capital expenditure plans, while Chinese foundries increase spending for expansion. SMIC raised its 2023 capex to US$7.5bn due to geopolitical factors, and Hua Hong plans US$2bn for 12-inch fabs.

• Stock Recommendations: TSMC, SMIC, and Hua Hong are recommended for their roles in technology leadership, localization, and specialty process in the 2024 growth cycle, respectively.

• Risks and Disclosures: Factors include inventory adjustment, weak broad-based recovery, low utilization, depreciation, and higher utility costs. Cautions on valuation and potential for divergence in performance.

The analysis supports a BUY or HOLD recommendation for specific stocks, with ratings from OUTPERFORM to UNDERPERFORM based on market outlook.