There is no good news for TSMC, Samsung fab cuts prices to grab orders

After recently saying that it would cut capital expenditures this year and suspend the construction of 28nm wafer fabs, TSMC has received another "bad news".

According to foreign reports, Apple’s original plan to introduce the M3 chip produced by TSMC’s 3-nanometer model into the recently released 15-inch MacBook Air notebook has changed for the first time, and the old M2 series chip will still be used. Outsiders believe that this move means that Apple’s first use of TSMC’s 3-nanometer new chip will be delayed.

After TSMC's 3nm was mass-produced as scheduled in the fourth quarter of last year, the industry paid close attention to the process of mass production. The market originally expected that Apple’s self-developed M3 chip equipped in the upcoming new MacBook Air would be TSMC’s 3nm mass production masterpiece. Now there is news that it will “wait a little longer”, which means that the timing of large-scale 3nm injection operations will also change. delay.

Regarding relevant reports, neither Apple nor TSMC had commented as of the deadline yesterday (17th). The legal person believes that Apple must be the first customer of TSMC's 3nm, but the notebook industry's inventory adjustment and economic changes will inevitably make dynamic corrections. Once the release of the M3 chip is delayed, Apple's first large-scale import of TSMC's 3nm chips may be this year. The high-end iPhone 15 model, which will be released in the fall, uses the latest A-series processor.

Bloomberg reports that developer records circulating in the market show that Apple has recently begun testing a 15-inch MacBook Air to ensure compatibility with third-party apps in the App Store. The specifications suggest that Apple’s long-rumored 15-inch MacBook Air will be released and will include content. It is expected to build a chip with performance equivalent to M2 instead of the previously rumored next-generation M3 chip. It is speculated that the M3 chip built by TSMC is expected to be released later.

The report pointed out that major updates to the Mac series will have to wait for the release of the M3 chip, and the M3 chip process will be upgraded from the current 5 nanometers to 3 nanometers. Apple will also use a processor produced using the 3nm process in this year’s new iPhone.

TSMC announced at its press conference in January this year that 3 nanometers will begin to contribute significantly to revenue in the third quarter. Driven by high-speed computing and smartphone customer applications, it aims to reach full production capacity in 2023. In addition, the N3E process belonging to the 3-nanometer family will be mass-produced in the second half of this year.

Apple's laptop business has also faced headwinds recently.

The latest report from research firm IDC pointed out that global PC manufacturers' total shipments fell by 29% in the first quarter of this year to 56.9 million units, far lower than the 59.2 million units in the first quarter of 2019, reflecting that the dividends from the epidemic have completely dissipated.

Among the major players in the market, every product arrangement factory cannot escape the fate of declining shipments. Lenovo and Dell's shipments fell by more than 30% in the first quarter, HP fell by 24.2%, Asus, which ranked fifth in market share, saw its shipments decrease by 30.3%, and Apple, which ranked fourth in market share, saw its shipments drop by as much as 40.5%. Among major PCs The situation in the factory was the bleakest.

However, according to the expectations of component manufacturers and research institutions, after the PC industry experienced a miserable first quarter, the channel side began to regain momentum in the second quarter. Although it cannot be said to be a rebound, there are signs of stopping the decline and picking up.

TSMC's 3-nanometer mass production was on schedule in the fourth quarter of last year, but it has not yet ramped up production. Industry insiders believe that the current poor market conditions for consumer products have put pressure on all wafer foundries, and TSMC's competitor Samsung's wafer foundry business is even more miserable. At the same time, faced with the pressure of shrinking exports and reduced orders from customers, they had to lower prices to grab orders.

According to industry observations, due to the sharper-than-expected inventory adjustment in the PC and consumer product markets, it has affected the mature process of wafer foundry and the utilization rate of some relatively advanced 7/8 nanometer production capacity. Both TSMC and Samsung cannot escape the impact, especially Samsung's wafer foundry. The industrial customer base is more concentrated and the impact will be more significant; TSMC has a relatively broad customer base and is expected to be less disrupted, but it will still inevitably encounter economic headwinds.

Industry insiders analyze that judging from the current deterioration of the global economic outlook, many major American manufacturers have plans to adjust the speed of new product launches, and even many small and medium-sized new technology companies are facing bankruptcy due to financial problems. It also reduces the demand for foundry capacity in the short term.

Regarding the changes in supply and demand in the semiconductor industry, the legal person speculates that the DRAM inventory adjustment in memory is expected to accelerate and come to an end. As for the mature wafer foundry process, after a drastic inventory adjustment began in the second half of last year, it is also expected to be nearing completion in the first half of this year; advanced processes On the other hand, TSMC has only entered inventory adjustment in the first half of this year, but the 3-nanometer process is still expected to grow in volume in the second half of the year. The growth rate still depends on client application shipments and changes in demand.

Recently, it has been reported in the industry that although the long-term demand for advanced semiconductor manufacturing processes is promising, due to economic changes and uncertainties, many major manufacturers have postponed the purchase of extreme ultraviolet (EUV) equipment, including TSMC, Intel and Samsung Crystal. The speed of EUV procurement in the round foundry business will slow down simultaneously in 2023.

The legal person believes that the capital expenditure adjustment of major semiconductor manufacturers in 2023 has become the market consensus. The industry generally expects that TSMC’s capital expenditure will remain the industry leader.

According to industry research, the magnitude of capital expenditure revisions for semiconductor factories this year varies. TSMC has revised capital expenditures down by about 10%. If the decline exceeds 20%, it means that the short-term pressure on the semiconductor industry is greater than expected.

*Disclaimer: This article is original by the author. The content of the article is the personal opinion of the author. The reprinting by Semiconductor Industry Watch is only to convey a different point of view. It does not mean that Semiconductor Industry Watch agrees or supports the view. If you have any objections, please contact Semiconductor Industry Watch.

Today is the 3375th issue shared by "Semiconductor Industry Observation" with you. Welcome to pay attention.