The Semiconductor Industry Association (SIA) announced that global semiconductor sales for Q3 2024 reached $166 billion, a 23.2% increase YoY and a 10.7% increase QoQ. September sales reached a record $55.3 billion, up 4.1% from August’s $53.1 billion.
SIA President John Neuffer stated that the global semiconductor market saw its strongest QoQ growth since 2016 in Q3 2024, with September sales hitting an all-time high, largely due to a 46.3% YoY increase in the Americas, which significantly contributed to the market’s expansion.
Regionally, September’s YoY growth was highest in the Americas (46.3%), followed by China (22.9%), Asia Pacific/All Other (18.4%), and Japan (7.7%), while Europe experienced an 8.2% decline. MoM growth was observed in Japan (5.3%), Asia Pacific/All Other (4.5%), the Americas (4.1%), Europe (4.0%), and China (3.6%).
Due to surging market demand, insufficient production capacity, and technological iteration, TSMC has recently increased prices for advanced process chips (such as 3nm, 5nm, and 4nm process chips) and CoWoS packaged chips.
According to the latest report from Morgan Stanley, TSMC is considering raising prices for its 3nm process and CoWoS advanced packaging technology to cope with the surge in market demand. TSMC plans to implement the price increase in 2025, with an expected price increase of up to 5% for the 3nm process.
The surge in demand for AI chips and the rise in production costs are the main reasons for the price increase. The research and development and production costs of advanced process technologies are high, including equipment investment, material costs, and R&D labor, which undoubtedly increases the pressure on the supply side. Multiple factors have jointly led to a tight supply of these chips, thereby driving up chip prices.
ST has lowered its revenue forecast for the third time this year, citing weak demand from industrial customers. The company noted that growth for its largest division now relies on expanding its presence in China. Alongside other automotive chipmakers such as Texas Instruments and Melexis, ST is focusing on the Chinese electric vehicle market to drive growth, as current clients cut orders due to high inventory levels and declining car demand.
As Europe’s largest chipmaker by revenue, with clients including Tesla and Apple, ST has traditionally been more focused on Western markets. However, CEO Jean-Marc Chery emphasized on a conference call that ST needs to increase its market share in China, despite losing ground there this year. Chery added that over the next three years, the company’s growth, particularly in its Power & Discrete and Analog segments, will hinge on its ability to capture a larger portion of the Chinese market.
ST is also looking to enter the artificial intelligence sector, where automotive-focused chipmakers have had limited traction. Chery mentioned a recent design win involving silicon and silicon carbide products for a Taiwanese supplier of power units for AI server infrastructure. These chips, based on silicon carbide, will help power AI processors from companies like Nvidia and AMD.
In the third quarter of 2024, AMD’s data center sales reached $3.549 billion, historically surpassing Intel’s $3.3 billion for the first time. This achievement is attributed to the competitive edge of AMD’s EPYC processors, which forced Intel to sell its Xeon CPUs at a significant discount, affecting its revenue and profit margins.
At the same time, while Intel’s flagship Xeon 6980P processor is priced as high as $17,800, AMD’s most expensive 96-core EPYC 6979P processor is priced at only $11,805. Although Intel may regain the lead over AMD in the fourth quarter, this will depend on market demand for its Xeon 6900 series processors and the increase in production volume. In addition, Nvidia’s revenue from data center GPUs and network chips far exceeds that of Intel and AMD, with its network product sales reaching $3.668 billion in the second quarter of fiscal year 2025, and its computing GPU sales reaching $22.604 billion.
Qualcomm’s shares surged 4% following the company’s robust quarterly revenue forecast, which has sparked investor confidence in a China-led smartphone market revival. As the largest supplier of smartphone chips, Qualcomm stands to add approximately $8 billion to its market value if the upward trend continues. The company’s forecast for first-quarter sales and adjusted profit exceeded market estimates, indicating a rebound in the smartphone market after a challenging 2023, driven by consumer upgrades to devices capable of supporting AI applications like chatbots and image generators.
Economic Daily News reports that TSMC may face new challenges in the “Trump 2.0” era, as Trump has threatened a “protection fee” over TSMC’s U.S. chip production dominance. Industry assessments suggest a high probability of TSMC tax increases. Four scenarios are outlined: 1) tax hikes and subsidy removal, 2) conditional tax hikes with subsidies, 3) subsidy removal without tax hikes, and 4) no changes, the most favorable but least likely. Trump’s “America First” policy makes the status quo unlikely, with tax hikes and CHIPS Act subsidy adjustments probable. This could lead to higher capital expenditures and manufacturing costs for TSMC. The report also suggests that under Trump, struggling U.S. competitor Intel might receive government support, potentially including acquisitions by AMD or Marvell. Trump’s policies could de-globalize the semiconductor industry, aligning with TSMC founder Morris Chang’s view that “globalization is dead” due to geopolitical tensions.
