In 2024, the global chip industry will usher in the biggest change in 20 years. This change was not triggered by Huawei's breakthrough in late August and early September last year, but because of the laws of the global chip industry itself. In fact, the US chip giant began to implement the layoff plan at the end of last year. In May, SEMI revealed important news that Intel plans to cut its budget by 10%, with two key divisions, the Client Computing Group (CCG) and the Data Center Sales Group (DCG), cutting employees by as much as 20%. However, the layoffs are only superficial, Intel uses the excuse of "global PC sales slowdown" as an excuse, in essence, the global chip industry is experiencing a huge change, and this change cannot be stopped.
The news that the global chip giant's performance in 2022 has collectively declined is really surprising. As the backbone of the tech industry, Intel has been a profitable myth for 30 years, but in the second quarter of 2022, it shattered that myth, losing $500 million in a single quarter. Even in the fourth quarter, revenue continued to decline, with a net loss of $700 million. For the whole year of 2022, Intel's revenue fell by 20%, and its net profit fell by a full 60%.
And the aforementioned Micron can not be described as a loss. In fiscal 2023, Micron's performance declined further. Revenue plunged 49.5% and net loss was $5.8 billion. Micron's only $15.5 billion in revenue is very little compared to previous years, and it almost stumbled on the road to scrapping. In fact, TSMC and Intel were planning to cut production capacity at the beginning of this year, and ASML's lithography machine orders were delayed by many chip manufacturers since the first half of the year. Recently, Goldman Sachs reported that TSMC plans to reduce capital investment from $28 billion to $25 billion in 2024. A considerable part of the investment is used to purchase ASML's most advanced EUV lithography machine.
Also hit hard are South Korea's two chip giants. In the fourth quarter of 2022, Samsung's chip revenue fell by as much as 24%, and its profit plummeted, plummeting by 97%! SK Hynix suffered a similar fate, with profits falling by a staggering 74.6% in 2022. How to purchase more advanced lithography machines has always been the focus of competition for semiconductor giants. In the past few years, ASML, as the only company currently producing EUV lithography machines, has been in short supply. Its EUV technology has pushed the semiconductor chip manufacturing process to new heights, and higher resolution and smaller chip size have brought huge innovation space to various industries. However, due to its limited production capacity, ASML's lithography machines have been in short supply, resulting in many companies being unable to obtain the required equipment in a timely manner.
The sharp decline in the performance of such chip giants has not only caused a major impact on themselves, but also has a serious impact on the entire supply chain. The slowdown in the supply chain is bound to affect the various industries associated with it, creating a series of chain reactions. There is no doubt that this will be a disaster for years to come. As a leading global foundry, TSMC's development strategy has always kept up with the trend of the times. Because it has made ambitious factory plans in the United States, Japan and Germany in previous years, it snapped up 60% of EUV lithography machine orders from ASML in advance. This move has attracted widespread attention and appreciation from the industry. However, with the changes in the global semiconductor market, TSMC's strategic planning also needs to be adjusted accordingly.
Looking back over the past few years, the chip industry has been a representative of rapid development. Major manufacturers continue to launch new products to meet the growing market demand and make great contributions to the development of the technology industry. However, with the continuous advancement of technology and the saturation of the market, the chip industry is facing unprecedented challenges. In August 2023, ASML President Wen Ningke admitted in an interview that a number of chip manufacturers EUV lithography machines have suspended shipments. The news surprised the industry. As a leading enterprise in the semiconductor industry, the changes in market demand of ASML will directly affect the development direction of the entire industry chain. However, Winningk did not give a specific explanation for this problem.
Wennink told the media in September 2023 that ASML expects to generate $2.2 billion in revenue from the Chinese market. However, whether Chinese companies will still purchase lithography machines in large quantities is a huge question in itself. According to Goldman Sachs' report, ASML's lithography machine sales are not optimistic, especially the more advanced the lithography machine is more difficult to sell. So, why does TSMC continue to buy ASML's most advanced EUV lithography machine? This involves TSMC's future development strategy and changes in market demand. Although the current sales of ASML's lithography machine are not satisfactory, TSMC still has confidence in its technology and products.
Market demand is gradually saturated, and consumer demand for new products is decreasing. In addition, because chip production requires huge capital investment and high-end technology support, the barrier to entry into the market is getting higher and higher, and new competitors are constantly emerging. Some emerging markets, such as China, have also begun to actively develop their own chip industries to compete with traditional chip giants. The advancement of technology has also made the chip industry face new challenges. The development of emerging technologies such as artificial intelligence and the Internet of Things has put forward higher requirements for the performance and energy consumption of chips. Traditional chip design and manufacturing models can no longer adapt to these new needs, and fundamental innovation and reform are required.
For chip giants, the dilemma is enormous. They need to fundamentally rethink their development strategies and innovate and change across the board. First, they need to increase investment in research and development and accelerate the research and application of new technologies. Second, they need to strengthen cooperation with various fields and jointly promote technological innovation and industrial upgrading. They need to optimize their organizational structures and processes to increase efficiency and flexibility.
Against the backdrop of the collective decline in the performance of global chip giants, we can't help but think about the challenges and opportunities facing the technology industry. Only continuous innovation and change can we remain successful in this competitive market. Let's wait and see if the chip industry can usher in a new dawn.