{"id":26818,"date":"2022-12-31T14:21:53","date_gmt":"2022-12-31T14:21:53","guid":{"rendered":"https:\/\/mailinvest.blog\/index.php\/2022\/12\/31\/falling-demand-for-hardware-hits-tsmc-as-nvidia-amd-others-slash-orders\/"},"modified":"2022-12-31T14:21:53","modified_gmt":"2022-12-31T14:21:53","slug":"falling-demand-for-hardware-hits-tsmc-as-nvidia-amd-others-slash-orders","status":"publish","type":"post","link":"https:\/\/mailinvest.blog\/index.php\/2022\/12\/31\/falling-demand-for-hardware-hits-tsmc-as-nvidia-amd-others-slash-orders\/","title":{"rendered":"Falling demand for hardware hits TSMC as Nvidia, AMD, others slash orders"},"content":{"rendered":"

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Cutting corners:<\/strong> The Taiwan semiconductor giant seemed to dodge the general malaise in the global tech sector throughout 2022, but falling consumer demand and other macroeconomic factors are finally catching up to it. However, analysts currently expect the company’s fortunes to start turning around later in 2023. <\/p>\n

TSMC’s financials in the fourth quarter of 2022 and the first quarter of 2023 are expected to show a decline with the company is reportedly renegotiating contracts as AMD, Nvidia, and MediaTek cut orders due to falling demand for their products.<\/p>\n

Sources have told<\/a> DigiTimes that the utilization rates for TMSC 7nm and 6nm fabs are expected to fall to 50 percent as clients order fewer wafers. The 28nm fabs that remain at capacity as of Q3 2022 will also start to slow down heading into 2023. The company is expected to post a 15 percent quarter-over-quarter revenue drop in Q1 and another decline in Q2 as its inventories grow.<\/p>\n

Conditions may start improving around the middle of next year as TSMC ramps up 3nm N3 production, which starts<\/a> this week. Apple will be the main customer for 3nm as another iPhone could help lift TSMC’s revenue.<\/p>\n

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While many other industry actors suffered from a slowing global economy, TSMC posted 50 percent revenue growth<\/a> year-over-year, partly thanks to Apple after supplying them with the A16 processor used in the iPhone 14. The Cupertino giant will again rely on TSMC for the iPhone 15’s 3nm-based chip in 2023.<\/p>\n

Moreover, Apple agreed to pay<\/a> 20 percent more for TSMC’s 3nm wafers than it did for 5nm. The Taiwan company will start charging $20,000 per N3 wafer due to equipment costs. Samsung already manufactures 3nm semiconductors, but yield problems forced clients like Qualcomm to switch to TSMC.<\/p>\n

The headwinds TSMC will face in the first half of next year stem<\/a> from falling demand for products like PCs, graphics cards, tablets, and smartphones as Western countries endure an economic downturn. Additionally, looming Covid waves in China could disrupt<\/a> manufacturing.<\/p>\n

Desktop graphics cards have been particularly hit hard, with one recent analysis showing sales reaching their lowest point since 2005<\/a>. High prices and the crypto mining crash are the biggest culprits.<\/p>\n<\/p><\/div>\n