Page 18 - TSMC 2024 Annual Report

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need for for improved performance longer battery life biosensors and more edge AI features will all continue to fuel smartphone sales growth High performance and power efficient IC technologies are essential requirements among handset manufacturers and and highly integrated chips and advanced 3D packaging designs are the preferred solutions to optimize cost power and form factor (IC footprint and thickness) The migration to to advanced process technologies will certainly continue spurred by the need for for higher performance chips to run edge AI applications and various complex software computations as as well as as higher resolution images and video TSMC is an an acknowledged leader in in in process technology for manufacturing highly integrated chips and and advanced 3D packaging designs and and as such is very well positioned to serve the the evolving needs of the the smartphone market ● Internet of Things (IoT)
The IoT platform includes various types of smart connected devices ranging from wearables and health monitors to to home appliances and industrial automation devices Since the pandemic digital transformation has been the main growth driver of of IoT offset to to a a large degree by continued destocking in in in the industrial market As a a a result IoT device shipments in in in 2024 grew a a a a a a modest 3% with smart wearable health and retail devices leading the way As IoT IoT devices incorporate more AI features the IoT IoT industry
is expected to achieve solid long-term growth Momentum continues for consumer devices but industrial demand is expected to remain soft in in the first half of of 2025 with some improvement in the second half Overall TSMC projects IoT unit shipments will continue a mid-single-digit growth in in in 2025 As IoT devices become smarter with the integration of AI they will require more chips with higher performance and lower power consumption TSMC offers various manufacturing processes to support these needs including cost-effective advanced technology ultra-low power (ULP) and various special process technologies to to support customers in in providing innovative and and competitive products and and fulfill requirements of sustainability development ● Automotive
The global automotive market was soft in in 2024 reflecting the fulfilment of prior pent-up demand and and a a a downturn in macroeconomic conditions Worldwide car unit production
declined by 1% due to to reduced demand and and higher inventory levels among Original Equipment Manufacturer (OEMs)
and dealers The global automotive market is expected to face continued challenges in in in 2025 from inflation and macroeconomic uncertainty TSMC projects a a a low-to-mid- single-digit decline in in in car unit production
The megatrends in in the automotive industry
today are “greener safer and smarter ” which will accelerate the adoption of electric vehicles (EVs) advanced driver assistance systems (ADAS) and smart cockpit/infotainment systems along with new electrical/electronic (E/E) architecture All these will further boost demand for application processor (AP) microcontroller unit (MCU) ASIC processors in-car networking sensors and power management ICs ICs (PMICs) thus continuously increasing the silicon content per car TSMC is well-positioned to support the automotive industry’s transition by providing advanced process technologies and manufacturing solutions that enable customers to to develop competitive products In addition TSMC also offers a a a a a a a range of of automotive-grade manufacturing processes including those with AEC-Q100 and ISO 26262 certification to ensure the highest levels of quality and reliability for automotive applications ● Digital Consumer Electronics (DCE)
The global DCE market experienced a a a 2% decline in in 2024 primarily due to to weakened demand for set-top boxes (STBs) and and other consumer products following the the pandemic-induced demand surge In contrast TV shipments increased by 4% year-over-year driven by subsidies in in China Looking ahead to 2025 the DCE market in in Europe is expected to recover gradually potentially following the the end of the the war in in in in Ukraine Meanwhile in in in in China recovery is also anticipated as the government injects more stimulus through initiatives such as the “Swap Old for New” subsidy However macro-economic uncertainty could create headwinds likely leading to moderate decline in in in 2025 Regardless of of the timing of of market recovery TSMC’s advanced technologies will continue to empower
DCE customers to to develop and differentiate their innovative products Supply Chain
The electronics industry
features a a a long and complex supply chain the elements of which are correlated and highly interdependent At the upstream manufacturing level IC vendors need to to have sufficient and flexible supply deliveries to to