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Taiwanese semiconductor manufacturer (TSMC) has responded to reports claiming that its groundbreaking 3nm (nm) chip manufacturing technology is suffering from delays. Earlier today, reports from research firms TrendForce and Isaiah Research indicated that the TSMC 3nm process would face delays and affect the company’s partnership with US chip giant Intel Corporation – which itself has struggled with manufacturing problems for several years.
TSMC’s response was benchmarked as the company declined to comment on customer requests and stated that manufacturing technology was on schedule.
TSMC stresses capacity expansion plans are on schedule following reports of hiccups
The two reports were the latest in a string of news that has cast doubt on TSMC’s 3nm manufacturing plans. The first bit of news came earlier this year when it was initially rumored, then confirmed, that Korean chip maker Samsung Foundry would start 3nm production before TSMC.
The statements made by TSMC President Dr. CC Wei indicated that his company will start manufacturing 3nm chips during the second half of this year. TSMC strives to maintain the technological prowess that has made it the world’s largest chip maker.
A TrendForce report shared that the company believes that Intel’s 3nm manufacturing delay will hurt TSMC’s capital spending because it could end up cutting spending in 2023. It also wasn’t shy about putting some of the blame on Intel, claiming that the design released initially caused Skip manufacturing to the first half of 2023 from the second half of 2022 – which has now been pushed back to late 2023.
This in turn has affected TSMC’s capacity utilization estimates – and the company is wary of not being able to idle as it struggles to buy 3nm orders. TrendForce has also shared that Apple will be the first 3nm TSMC customer – with products launched next year, AMD, MediaTek and Qualcomm will produce 3nm products in 2024.
Isaiah Research was more responsive with details of the delay, sharing the number of chips expected to be manufactured initially and the drop after the alleged delay. Isaiah explained that TSMC initially planned to produce 15,000 to 20,000 3nm wafers per month by the end of 2023, but this has now been reduced to 5,000 to 10,000 wafers per month.
However, while addressing the remaining spare capacity concerns due to the decline, the research firm remained optimistic as it indicated that the majority of equipment (80%) for advanced manufacturing processes such as 5nm and 3nm is interchangeable, which means TSMC retains the ability to utilize it for other customers.
TSMC’s response to the entire issue sent to the Taiwanese magazine United Daily News was brief, with the company stating the following:
“TSMC does not comment on individual customer business. The project to expand the company’s capacity is proceeding as planned.”
The semiconductor industry, which is currently facing a historic slowdown due to a supply and demand mismatch in the wake of the coronavirus pandemic, has been considering capacity cuts and capital spending for some time. Chinese foundries have lowered average selling prices (ASPs), and Taiwanese chip makers have begun offering different prices for different lots to ensure demand does not diminish.
However, TSMC has made no such announcements, and the question of balancing capacity cuts with increased demand, particularly for newer products, remains a thorn in the chip makers’ side, as at one end they risk spending too much on idle machines and on and the other, reducing of revenue harvesting in case of increased demand.
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