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TSMC Cuts Down Orders By Up to 50%, Sending Shockwaves Says Report
The Taiwan Semiconductor Manufacturing Company (TSMC) has significantly cut down its orders to suppliers, sending shockwaves says report.
wccftech.com
The Taiwan Semiconductor Manufacturing Company (TSMC) has cut down its orders to suppliers according to reports in the Taiwanese press. TSMC, which is facing an industry slowdown as its customers struggle with demand slowdown, cut down capital expenditures for 2022 earlier this year, and the firm cited a lack of demand forecasting as the primary reason behind the drawdown. Now, the firm is also rumored to have significantly reduced its 3-nanometer output estimates for this year, in the latest bit of speculation surrounding the advanced chip manufacturing technology scheduled to enter production in the current quarter.
UDN's sources believe that TSMC has reduced these orders by as much as 50%, with the drop coming after the fab also cut down its spending. Due to the critical nature of the company as Taiwan's largest and leading chipmaker, the order cutdown has also sent shockwaves down the chip sector as a whole.
According to TSMC's suppliers, the order flow started to weaken in the previous quarter, and this has continued into the current quarter and into the first quarter of next year as well. TSMC shared during its latest earnings report that it is facing difficulty in procuring chipmaking equipment, especially to keep up with its customer orders, and that this when combined with an industry slowdown is forcing the firm to reduce spending.
On the topic of 3-nanometer, the picture painted by UDN is not great either. Its sources suggest that the monthly average output for the new technology was slated to sit at 44,000 wafers previously, and this has now dropped by a whopping 34,000 wafers to now sit at 10,000 wafers for a 77% drop. Key reasons behind this drop are reduced orders from both Apple and Intel - with Intel's own technology also facing delays and Apple choosing to launch its M2 personal computers in March. These imply that TSMC will not be making any chips for Apple this year, and since Intel itself is also facing delays, its products which use some of TSMC's chips will also see orders flow in later.
Demand for chips has fallen, yet these tech companies continue to act as if they are in a booming market.
It's time to get back to a normal market. Enough of rising prices for consoles, CPUs, motherboards and especially GPUs.
They should be reducing waffer prices to pre-2020 values, and increase sales? But greed a tough mistress.
Now TSMC risks having their factories at half production, or maybe even be forced to stop some factories to save cost.