Published: 31 October 2019
Summary
Higher wafer demand of advanced technologies from Apple, Huawei, Qualcomm and AMD lifts the business in the second half of the year following a weak first half. Foundry revenue in 2019 is projected to decline by 0.2% versus 2018. The U.S.-China trade issue remains as a key uncertainty factor.
Included in Full Research
- Forecast Assumptions
- Market Impacts
- Notable Changes
- Influencing Factor: End-Market Demand
- Forecast Assumption: Annual wafer demand on 7 nm and 5 nm will be increased by a factor of 2.5 from 0.85 million 300 mm wafers in 2019 to 2.28 million wafers in 2023 with the acceleration of 5G adoption.
- Influencing Factor: Macroeconomy
- Forecast Assumption: Although the possibility of a global recession is much higher than normal, it is not the likely scenario; our foundry forecast is based on continuing global GDP growth.
- Forecast Assumption: As the ban on Huawei products by the U.S. keeps swinging on and off, the uncertainty has benefited foundries with orders from the Huawei supply chain, lifting the overall foundry wafer demand in 2H19 by 0.5%.
- Influencing Factor: Foundry Supply-and-Demand Balance by Technology
- Forecast Assumption: A possible 10,000-wafers-per-month shortage of 7 nm node in 4Q19 at TSMC is only short-lived and will be resolved by 1Q20.
- Influencing Factor: Foundry Capital Spending
- Forecast Assumption: Foundry 2019 capex is increased by $1.7 billion to $21.7 billion due to the need for increased capacity in serving increased wafer demand of 7 nm and 6 nm nodes for 2019 and 2020.