Taiwan Semiconductor Manufacturing Co. (TSMC), the world’s leading foundry and chip maker, has reportedly seen a decline in orders from its leading customers, affecting the company’s results starting in the fourth quarter of 2022. are affected. This news comes despite TSMC’s successful volume production. 3nm technology with good yield.
According to DigiTimes, TSMC’s utilization rate is expected to drop significantly in the first quarter of the year. This is reflected in the stacking of wafer banks, which has reached a new high, and orders from leading customers are down 15%. Almost all of TSMC’s clients are expected to experience downturns and will need to reduce orders in the first quarter of 2023, leading to a significant decline in TSMC’s utilization rate. This will affect all of TSMC’s production lines, including those that use 7nm, 6nm-class technologies (N7-capable lines), which are expected to have a utilization rate of around 50% by early 2023.
TSMC’s N5/N4-capable lines, which are typically used to produce advanced products such as smartphone SoCs, are expected to be underutilized. The report also indicates that even TSMC’s N28-capable fabs, which are fully loaded by the start of the chip deficit in early 2021, will experience lower utilization. Declining demand for advanced handsets in the first half of the year is likely contributing to this trend as popular products like the iPhone typically launch later in the year.
A number of factors, including a sluggish economy in China due to the COVID-related lockdown and a decline in demand for many products worldwide, have reduced purchases of new chips from companies such as AMD, Intel, MediaTek, and Nvidia by major computer hardware majors. has led to, PC, and smartphone manufacturers. As a result, fabless chip designers have reportedly been forced to cut their orders to TSMC.
The reported cuts to TSMC’s orders are expected to take effect in the fourth quarter of 2022, leading to an increase in the company’s inventories. It is not yet clear how these significantly reduced orders will affect TSMC’s earnings for the quarter. However, DigiTimes estimates that TSMC’s sales for the first quarter of 2023 will decline by more than 15% quarter-on-quarter. That’s in contrast to the first quarter of 2022, when TSMC’s revenue rose 12.1% from its revenue for the fourth quarter of 2021.
Source: DigiTimes (through Tom’s Hardware)
