Throughout 2022, the Taiwan semiconductor behemoth TSMC appeared to have avoided the general downturn in the global tech sector, but now it is finally being affected by declining consumer demand and other macroeconomic issues.
Analysts now predict that the company’s financial situation will start to improve later in 2023.
As AMD, Nvidia, and MediaTek reportedly cut orders owing to declining demand for their goods, TSMC is projected to have a decline in its financial results in the fourth quarter of 2022 and the first quarter of 2023.
As clients place fewer wafer orders, sources have told DigiTimes that TMSC’s 7nm and 6nm fab utilization rates are predicted to drop to 50%.
By the third quarter of 2022, the 28nm fabs that are still operating at capacity will begin to slow down as well.
As its stocks increase, the company is anticipated to report a 15 percent reduction in revenue from the previous quarter in Q1 and another decline in Q2.
As TSMC builds up 3nm N3 production, which begins this week, conditions may start to improve around the middle of next year.
The primary customer for 3nm will be Apple because an additional iPhone might increase TSMC’s income.
While many other industry players were negatively impacted by the weakening global economy, TSMC saw a 50% increase in sales year over year, in part because Apple had purchased the A16 processor that was used in the iPhone 14 from them.
For the 3nm-based technology in the iPhone 15 in 2023, the Cupertino behemoth will once more rely on TSMC.
Additionally, Apple agreed to pay 20% more than it did for 5nm TSMC 3nm wafers.
Due to equipment costs, the Taiwanese business will start charging $20,000 per N3 wafer.
Although TSMC now produces 3nm semiconductors, companies like Qualcomm were compelled to transfer from Samsung due to yield issues.
The challenges that TSMC will experience in the first half of next year are caused by the decline in demand for goods like PCs, graphics cards, tablets, and smartphones as the economies of Western nations experience a downturn.
Furthermore, oncoming COVID waves in China might stop production.
One recent survey revealed that sales of desktop graphics cards have fallen to their lowest level since 2005. The main offenders are soaring prices and the collapse of cryptocurrency mining.
To read our blog on “TSMC is working toward 1nm and hopes to move 3nm chips production in US,” click here.
