TSMC's 3 nm Node at Near 50 Percent Utilisation, Other Nodes Seeing Lower Demand

[TheLostSwede]

Based on multiple reports out of Taiwan, TSMC is seeing increased utilisation of its 3 nm node and its production line is now at close to 50 percent utilisation. The main customer here is without a doubt Apple and TSMC is churning out some 50-55,000 wafers a month on its 3 nm node. TSMC is also getting ready to start production on its N3E node later this year, which will see some customers move to the node.

However, it's not all good news, as TSMC is seeing a decline in utilisation on its 5/4 and 7/6 nm nodes as demand has dropped significantly here, with different news outlets reporting different figures. Some are suggesting the 7/6 nm nodes might have dropped as low as to 50 percent utilisation, others mention 70 percent. The 5/4 nm nodes aren't anywhere nearly as badly affected and remain at around 80 percent utilisation. The good news for TSMC is that this is expected to be a temporary slump in demand and most of its leading edge nodes should be back at somewhere around a 90 percent utilisation rate by the second half of the year. However, this depends on what the demand for its partners' products will look like going forward, as many of TSMC's customers are seeing lower demand for their products in turn.



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[TumbleGeorge]

I guess nothing is left of TSMC's attempts to extort its customers with higher prices? Which were discussed last year.

 

[AnotherReader]

I guess nothing is left of TSMC's attempts to extort its customers with higher prices? Which were discussed last year.

The greatest price increases were for older nodes.

The world's largest foundry intends to increase prices of wafers processed using its newer N7 and N5 process technologies by 10%, while prices of older N16 and thicker nodes by 20%.

 

[THU31]

Lower the wafer prices, you greedy bastards, and you will see increased utilization. It's as simple as that.

 

[AnarchoPrimitiv]

Lower the wafer prices, you greedy bastards, and you will see increased utilization. It's as simple as that.

Yeah, I agree...but I'm sure they see it as if they lower the prices, they'll have a lot harder time raising them in the future

 

[kondamin]

How much is that because of the China ban?

 

[RandallFlagg]

This is actually right in line with the 30-50% decline in consumer electronics sales across the board.

The only ones doing well are the older nodes that cater to industrial and automotive electronics, like UMC.

 

[P4-630]

How much is that because of the China ban?

China is producing their own chips, just not with the latest and greatest technology since ASML won't deliver them EUV and better machinery.

 

[Space Lynx]

really cant wait for late 2024, hope we get some 3nm node gpu's and cpu's. Apple is seeing year over year less demand, so it wouldn't surprise me if they revise and sell off some of their 3nm node time to some other companies.

 

[kondamin]

China is producing their own chips, just not with the latest and greatest technology since ASML won't deliver them EUV and better machinery.

TSMC was making a heck of a lot of chips for Chinese companies and China was buying quite a significant portion of American companies Chips made by tsmc.
The trade ban imposed on the entire industry is seriously hurting the bottom line.

the economic crash of 2008 ruined the move to 450mm (18inch) wafers, I wonder what the current mess will ruin

 

[Space Lynx]

TSMC was making a heck of a lot of chips for Chinese companies and China was buying quite a significant portion of American companies Chips made by tsmc.
The trade ban imposed on the entire industry is seriously hurting the bottom line.

the economic crash of 2008 ruined the move to 450mm (18inch) wafers, I wonder what the current mess will ruin

why can't we all just get along eh mate?

 

[JAB Creations]

Lower the wafer prices, you greedy bastards, and you will see increased utilization. It's as simple as that.

I sure am glad we have highly sophisticated analysis of the supply and demands of various markets across the world where businesses that need TSMC chips can order based on TSMC's pricing with zero regard for the demand for the products they produce using those chips. I will be sure to place my entire portfolio's hope in your capable hands.

 

[Space Lynx]

I sure am glad we have highly sophisticated analysis of the supply and demands of various markets across the world where businesses that need TSMC chips can order based on TSMC's pricing with zero regard for the demand for the products they produce using those chips. I will be sure to place my entire portfolio's hope in your capable hands.

a lot of people just don't understand that for a business to survive long term, there has to be long term planning in the prices too. in an age of inflation especially. if I want TSMC to exist long enough for 1nm node, I probably need TSMC to make decent profits to invest in that node.

 

[Wirko]

if I want TSMC to exist long enough for 1nm node

Why not. In reality, approximately, "5 nm" = 35 nm, "3 nm" = 33 nm and so on. "1 nm" will be ~31 nm, with some trick like a transistor standing on the head of another transistor, for a bit more density.

 

[Minus Infinity]

Lower the wafer prices, you greedy bastards, and you will see increased utilization. It's as simple as that.

Also maybe people should read this: TSMC's 3nm node is not that good

TSMC’s 3nm Conundrum, Does It Even Make Sense? – N3 & N3E Process Technology & Cost Detailed

Shrinking finally costs more, Moore’s Law is now dead in economic termsA couple of weeks ago, we were able to attend IEDM, where TSMC presented many details about their N3B and N3E, 3nm class…

www.semianalysis.com

 

[TheinsanegamerN]

a lot of people just don't understand that for a business to survive long term, there has to be long term planning in the prices too. in an age of inflation especially. if I want TSMC to exist long enough for 1nm node, I probably need TSMC to make decent profits to invest in that node.

And that's fine, except tsmc was delivering record revenue well outside of inflation rate. That is price gouging, and the new shiny yacht is not assisting node production

 

[freeagent]

Everyone including the grocery store is gouging us..

You do have a choice though.. buy, or do not buy..

 

[Space Lynx]

Everyone including the grocery store is gouging us..

You do have a choice though.. buy, or do not buy..

I have changed my eating habits, for the better.

Take negatives and turn them into positives.

Carrots, celery, all the healthy stuff is still dirt cheap and didn't raise in price. Speaking of which time to go eat some peanut butter celery now and possibly an orange as my dessert, ice cream ain't got shit on a good orange.

 

[Chaitanya]

I have changed my eating habits, for the better.

Take negatives and turn them into positives.

Carrots, celery, all the healthy stuff is still dirt cheap and didn't raise in price. Speaking of which time to go eat some peanut butter celery now and possibly an orange as my dessert, ice cream ain't got shit on a good orange.

Eat seasonal and local you will have positive impact on your health and help fight global warming.

 

[Space Lynx]

Eat seasonal and local you will have positive impact on your health and help fight global warming.

they only grow corn where I live, so I will die.

 

[Ferrum Master]

Just lower the prices...

Looks like TSMC isn't getting the message.

I suspect in 5 years TSMC should collapse or turn to UMC levels. Industry will not allow to repeat the hostage situation again. The gears are already moving towards it. The final blow should be Apple/US policy to manufactured in mainland only and then bye bye.

 

[watzupken]

I do wonder if it is a temporary slump or bump? Apple may be utilizing TSMC's 3nm to a large extent now, but that does not mean it will continue in the near future. The reason for the 3nm demand is because Apple is ramping up their chip for next gen iPhone and Macs. If the demand is soft for these products, the demand for 3nm is going to slump as well. And for their high asking price, it may be a matter of time people starts leaving them for cheaper fabs. In the next few years, I think there shouldn't be a shortage of fab since all the major fabs are expanding aggressively.

 

[Pumper]

I guess nothing is left of TSMC's attempts to extort its customers with higher prices? Which were discussed last year.

When you have a monopoly chip production, you can grab the customers by the pussy. You can do anything.

 

[The Von Matrices]

Just lower the prices...

Looks like TSMC isn't getting the message.

Is that really the solution though? The chip itself only accounts for a part of the price of the devices in which they are located. TSMC increasing prices drives up cost of the final product slightly, but that isn't enough to explain the majority of the drop in demand.

The bigger trend is that vast majority of the public upgraded their devices in 2020-2021 during lockdowns and they are still working properly with no need for an upgrade in 2023. Combined with higher interest rates making financing new purchases less attractive, you have a slump in the market that is reducing demand for chips regardless of the price.

I highly suspect that TSMC has done the math and found that leaving some of their capacity idle results in fewer losses than dropping prices. Keeping prices constant also avoids making your current customers angry (because they are locked into long-term contracts at the higher prices).

the economic crash of 2008 ruined the move to 450mm (18inch) wafers, I wonder what the current mess will ruin

450mm wafers had a lot of other issues that made them only a marginal improvement in capacity over 300mm. The biggest bottleneck now is throughput of the EUV scanners, and that doesn't scale with the size of the wafers making 450mm little better than 300mm.

 

[Ferrum Master]

I highly suspect that TSMC has done the math and found that leaving some of their capacity idle results in fewer losses than dropping prices. Keeping prices constant also avoids making your current customers angry (because they are locked into long-term contracts at the higher prices).

What math? Their factory is underutilized, anything not utilized 100% means loss for them. You don't earn on unmade silicon, you pay salaries to people and logistics that do nothing.

The problem is they got caught also in the bitcoin bubble demise and as usual for Asian companies, they a damn slow to adapt to it, bureaucrats, they sometimes even top Soviet habits, but hey... PCR is near lol. They didn't realize it is over, NVidia strongly signaled with making silicon at Samsung that the games are over and TSMC cannot play the monopoly card also, as they wanted larger piece of the pie. Soon many fabs will become operational and let us see how the greed will pay off.

The objective historical statistics should be normalized without silicon made for crypto. Then the real consumer device market demand number should align as it should, with increase actually, yes. Covid did spark some numbers up, but not that drastically as you wish... I suspect those numbers got mixed with crypto and some(nvidia) did that on purpose. There were need for basic laptops and PCs for school/work etc but why the heck why that would need overpriced RTX cards to have online lectures or work meetings? For RTX crap voice as some leather jacket tried to upsell as next best thing since sliced bread? The amount of farming was huge everywhere, people only grasp a small part of it from media and think that it doesn't happen around them, but it did. TSMC suffers from it, they are slow to adapt. That was known already more than half year ago and still they act like princesses.