Top 10 TSMC Customers Said to have Cut Orders for 2023

[TheLostSwede]

On the day of TSMC's celebration of the mass production start of its 3 nm node, news out of Taiwan suggests that all of its top 10 customers have cut their orders for 2023. However, the cuts are unlikely to affect its new node, but rather its existing nodes, with the 7 and 6 nm nodes said to be hit the hardest, by as much as a 50 percent utilisation reduction in the first quarter of 2023. The 28 nm and 5 and 4 nm nodes are also said to be affected, although it's unclear by how much at this point in time.

Revenue is expected to fall by at least 15 percent in the first quarter of 2023 for TSMC, based on numbers from DigiTimes. The fact that TSMC has increased its 2023 pricing by six percent should at least help offset some of the potential losses for the company, but it all depends on the demand for the rest of the year. Demand for mobile devices is down globally, which is part of the reason why so many of TSMC's customers have cut back their orders, as Apple, Qualcomm and Mediatek all produce their mobile SoCs at TSMC. Add to this that the demand for computers and new computer components are also down, largely due to the current pricing and TSMC is in for a tough time next year.



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[Tomgang]

No wunder orders has been cut down.

The world economy has changed in to a lower gear with less demand. Inflation, insecurities for peoples future economy and jobs, wars, interests rate and so on. Has slowed the world economy and 2023 will i think be in the recessions light. If not a global recession, so at least a recession in Europe where I live with the energy crisis and skyrocketing inflation. A recession is hard to avoid, it more like how bad is the recession and how long will it take. In the US I am not sure, but I would expect some sort of downward spiral for the economy as long the world central banks keeping the rates high lending money.

2023 is going to be a year of hardship for at least some people do to economic strain and insecurities.

But let's try to see positive things as well. With less demand for hardware. There are less chances of hardware going in the hard to get and by that very expensive.
Less demand and better available in stores. Has the side effects of sometimes lowering the price of hardware as well. So those who are still looking for hardware in 2023 and has some cash to burn. Might be in for a cheaper build or upgrade than it has been for the last 2-3 years.

 

[Space Lynx]

Building like 4 new factories that aren't even finished yet probably wasn't the smartest idea then huh? lol

 

[mb194dc]

Great so build a reasonably priced GPU with the spare capacity..! Markets can work.

Ultra high priced tech is not selling well. It's only a matter of time before we get profit warnings and guidance downgrades across the industry.

Everyone still producing hardware for Lockdown and mining markets... Gone...

 

[lemonadesoda]

Anyone know how big the GPU crunching market was in 2020, 2021 and 2022? In terms of $GPU sold for this activity? Because I think that market is coming to a crashing slowdown. And giving people sitting on office chairs overpowered PCs (speed and energy consumption beyond need) will not sit well with the finance director this budgeting season.

With electricity prices up significantly, there is a huge market for new node silicon, but in a different market segment. This is not for the fab to decide, but for OEMs to see market growth in upgrading PCs to significantly lower power usage, and new PCs and GPUs in a far lower energy envelope. The problem is, mid end CPU and GPU dont make for sexy advertising. The Product Managers , PR and marketing need to think strategically about the shift in purchasing priorities to low power consumption.

 

[ARF]

Anyone know how big the GPU crunching market was in 2020, 2021 and 2022? In terms of $GPU sold for this activity? Because I think that market is coming to a crashing slowdown. And giving people sitting on office chairs overpowered PCs (speed and energy consumption beyond need) will not sit well with the finance director this budgeting season.

With electricity prices up significantly, there is a huge market for new node silicon, but in a different market segment. This is not for the fab to decide, but for OEMs to see market growth in upgrading PCs to significantly lower power usage, and new PCs and GPUs in a far lower energy envelope. The problem is, mid end CPU and GPU dont make for sexy advertising. The Product Managers , PR and marketing need to think strategically about the shift in purchasing priorities to low power consumption.

100%.
There are 4-5-W APUs which can serve all office PCs.

 

[ixi]

100%.
There are 4-5-W APUs which can serve all office PCs.

Can you tell at least 1 desktop apu with 4 or 5w usage?

 

[马嘉伟]

That may be good news for AMD. RDNA2 production was much lower than Ampere and did not improve until 2022. The ZEN3 was also out of stock for half a year before prices returned to normal in mid-2021.

Cutbacks by other customers mean more capacity for AMD. AMD may be able to continue to leverage its low price strategy to expand its consumer GPU market.

But most of TSMC's shrinking orders came from 7nm and 6nm. Now AMD's new products are mainly 5nm, maybe AMD won't improve much either?

 

[Pumper]

Building like 4 new factories that aren't even finished yet probably wasn't the smartest idea then huh? lol

It's almost like it takes years to build a chip factory and the market conditions will be different by the time they are finished.

 

[Space Lynx]

It's almost like it takes years to build a chip factory and the market conditions will be different by the time they are finished.

We'll see, Apple is already considering two year cycles for some phones, as more and more people realize their shiny new phone doesn't need to be upgraded that often... demand will continue to go down.

 

[Flanker]

We'll see, Apple is already considering two year cycles for some phones, as more and more people realize their shiny new phone doesn't need to be upgraded that often... demand will continue to go down.

If everyone can start having 2 year cycles and not have 70 similar phones in a series it would be fantastic

 

[ARF]

Can you tell at least 1 desktop apu with 4 or 5w usage?

Who said that it has to be "desktop"?!

It can be e-series, TDP - 6 W, 4.5 W, 3.95 W:

Processor Specifications | AMD

 

[Space Lynx]

If everyone can start having 2 year cycles and not have 70 similar phones in a series it would be fantastic

Oh i agree, I mean with 7nm, 5nm, and now 3nm phones, honestly 5 year cycles should be the new norm, but the phone companies probably won't ever allow that... they will keep raising prices on battery replacement as a counter measure i suspect

 

[Bomby569]

Building like 4 new factories that aren't even finished yet probably wasn't the smartest idea then huh? lol

they are the only ones doing the smallers nodes, so your paying for it, it really doesn't matter to then. And they even pocketed the government subsidies

 

[lemonadesoda]

I could really use some SoC/APU mainboard swapouts. Got quite a fewSupermicro Atom D525 servers running firewalls and internal webservers. I’d be happy to spend 5x €150 a piece for swapouts to lower power. I really dont need modern fast just modern low power. Unfortunately everything on the market is targeted to different performance profiles and at current prices do not warrant the investment in our relatively low utilization devices. So we burn electricity and overheat the racks

 

[PCL]

"Have you seen what we can charge for anything with a chip these days? Why would we want to normalize supply?!"

 

[SOAREVERSOR]

Building like 4 new factories that aren't even finished yet probably wasn't the smartest idea then huh? lol

That wasn't the main thrust of it though. A lot of these companies got straight cash from governments to do it. There were two main reasons. First the amount of IP theft and security risks to goods in China is going to have to result in embargos. The second is that COVID showed the weakness of supply chains and that some stuff needs to be made in country.

 

[ThrashZone]

Hi,
Yep China still in lock down mode

 

[claes]

Uh actually they are “unlocking,” they abandoned zero-Covid policies last month and are finally seeing their first real outbreaks

China Covid: experts estimate 9,000 deaths a day as US says it may sample wastewater from planes

Infectious disease experts believe strategy more effective in slowing virus spread than new travel restrictions, as health data firm says thousands are likely dying daily in China

www.theguardian.com

 

[SOAREVERSOR]

Hi,
Yep China still in lock down mode

No, that's not really the issue. You know what truly killed it? Shipping! I was in the Navy and ships are fucking petri dishes. It's very easy to wipe out a crew. So not only did factory shutdown shipping had to shutdown. There's a problem with this. Factories are hard, but possible to bring back up. Ships, no way in hell. Due to all the saltwater when in dock or dry dock they rust and rot out and can take years, to decades to bring back even if it's only for a brief time. It's also so costly if a company is down for a bit, it's over that company is gone and those ships are not coming back. Now another company has to come out, drag them up, scuttle them (set explosives and sink the fuckers in very deep water) and you get to build ones. Which again, takes years and costs more millions.

Worse, this also impacts transport from docks. We had multi monthlong clusterfucks in the US because all the dockworkers got sick because we were too stupid to lockdown and force people to vaccinate as soon as possible. Ditto with trucking and rail. So now you have ships with no food creating virus mass infections so their crew are down and nobody to unload or move the stuff if it could arrive. The catch is the only way to move goods is shipping or train. Other methods are stupid expensive, not practical, and prone to failure. So a bulk decision was made by a lot of countries to quit screwing about with foreign supply chains and also trucking and invest heavily in local manufacturing, rail, and shipping. All so that the next time this happens they aren't stuck with it.

An immediate, full, total lockdown, with mandatory vaccines, global distribution of them (a lot of people who work in shipping are from Africa, Asia, or Latin America and nobody was going to give them free vaccines in any bulk support) would have hurt hard off the bat but avoid the long term things. But instead we got stamping of footsies "I want to go to church and the bar" nonsense along with "no money for poor countries" and now here we all are!

 

[Gica]

The world economy has changed in to a lower gear with less demand. Inflation, insecurities for peoples future economy and jobs, wars, interests rate and so on. Has slowed the world economy and 2023 will i think be in the recessions light. If not a global recession, so at least a recession in Europe where I live with the energy crisis and skyrocketing inflation.

Correct!
Europe is run by a bunch of corrupt idiots. I cannot explain in any other way the closing of some energy facilities (even the nuclear ones!!!!) and becoming dependent on a country led by a criminal despot.
A cold shower was needed anyway because the prices went crazy in all segments.

 

[ARF]

Europe is run by a bunch of corrupt idiots.

True!

I cannot explain in any other way the closing of some energy facilities (even the nuclear ones!!!!)

Europe doesn't produce energy except if develops high scale nuclear. But Germany for ideological reasons doesn't want to have nuclear power plants, and will for this reason import liquid gas from the USA !
Which will kill Germany's industry which is not competitive on costs background.

 

[SOAREVERSOR]

Correct!
Europe is run by a bunch of corrupt idiots. I cannot explain in any other way the closing of some energy facilities (even the nuclear ones!!!!) and becoming dependent on a country led by a criminal despot.
A cold shower was needed anyway because the prices went crazy in all segments.

Capitalism! The market demands the lowest costs and the highest profits. Live by capitalism and die by it. The market is god.

 

[Legacy-ZA]

Building like 4 new factories that aren't even finished yet probably wasn't the smartest idea then huh? lol

The greedy are being screwed by the greedy.

Juicy.

 

[N3utro]

You guys only consider energy in term of TDP. But the energy required to create new hardware is much greater than the energy used by a chip over its lifespan. If you want to save energy for the planet, start by keeping your own hardware longer instead of changing to new, lower tdp ones.