• TSMC has joined different semiconductor companies successful giving blimpish guidance owed to the expected manufacture downturn successful the adjacent fewer quarters. This includes declining the capableness utilization complaint from Q4 2022, capex cuts successful 2022 and 7/6nm bid adjustment.
• TSMC’s 7/6nm contributed 26% to the full gross successful Q3 2022. Based connected our analysis, smartphone and HPC-Computing (PC and server CPUs, and GPUs) are the 2 largest segments successful this exertion node, accounting for 32% and 38%, respectively, of the full wafer shipment measurement for 2022.
• TSMC has blamed the 7/6nm softness connected cyclical inventory accommodation and merchandise delays from smartphone and PC clients. It looks the inventory rhythm volition persist into 2023, chiefly from AP/SoCs for mainstream 5G smartphones.
• We hold with TSMC’s presumption connected affirmative drivers of caller merchandise migration connected the 7/6nm node, similar Wi-Fi, RF and SSD controller ICs, aft the inventory rhythm successful 2023.
Although TSMC is inactive assured astir its concern maturation successful 2023, the institution admitted during its capitalist league for Q3 2022 that inventory headwinds would deed its near-term income outlook with declining utilization rates successful definite geometry nodes. The full-year superior disbursal revision for 2022 from $40 cardinal to $36 cardinal echoed its blimpish views connected delaying caller capableness builds amid the planetary semiconductor downturn, including the withdrawal of the caller 7/6nm enactment successful Fab 22 owed to uncertain marketplace demand.
While TSMC expected coagulated request for its existent 5/4nm nodes with a precocious utilization complaint successful Q4 2022 too, it gave blimpish guidance for 7/6nm connected projections of a declining utilization complaint successful the adjacent fewer quarters. TSMC attributed this to smartphone weakness, arsenic good arsenic merchandise delays successful PC-related chipsets. The institution expects the inventory accommodation rhythm for each TSMC exertion nodes and spot productions to apt persist into 2023.
TSMC’s 7/6nm node was its largest gross constituent earlier Q3 2022, contributing to astir 30% of its concern during the archetypal 3 quarters of 2022. TSMC owned a full of 145-150 KWPM (thousands of wafers per month) installed capableness connected 7/6nm during H1 2022 but volition set the accumulation program for immoderate instrumentality tools successful H2 2022, partially taking into relationship the deteriorating marketplace request for smartphones and PCs.
By breaking down TSMC’s wafer shipments for 7/6nm products, we recovered HPC-related products (including PC and server CPUs, discrete GPU, information halfway accelerator and ASIC/FPGA) accounted for 38% successful 2022, followed by smartphone-related (mainly connected AP/SoCs) chipsets astatine 32%. MediaTek, AMD and Qualcomm appeared to beryllium the apical 3 clients successful this category.
Supply concatenation inventory to stay precocious astatine 2022 end
Reviewing the inventory level for smartphone AP/SoCs, which is the large exertion of precocious foundry nodes (10nm and below), we judge the bid corrections to chipset vendors volition beryllium nether greater unit from H2 2022 amid weakening end-market (sell-through) information point. The spot accumulation pb clip is arsenic agelong arsenic implicit 4 months successful precocious nodes, starring to a lagged effect of wafer output reductions earliest from Q4 2022 successful smartphone AP/SoCs, CPU/GPU and AI processors. Accordingly, the chipset-level inventory rhythm appears to person conscionable started from H2 2022 and volition persist into the remainder of the twelvemonth oregon into the archetypal fractional of 2023, arsenic TSMC commented during the capitalist league call.
More of a cyclical accommodation contented successful 7/6nm
As the planetary foundry industry’s utilization complaint has reached its highest level successful mid-2022, the downtick volition bring down concern successful each aspects successful the adjacent fewer quarters earlier immoderate signs of betterment look successful inventory levels crossed the semi proviso chain. All of TSMC’s exertion nodes volition beryllium inevitably impacted, peculiarly 7/6nm with its higher attraction of smartphones and user PCs. The utilization complaint present volition driblet to 80%-90% successful the adjacent 2 to 3 quarters anterior to the request betterment driven by mainstream 5G smartphone AP/SoCs and Intel’s acceleration of its Meteor Lake CPU tile orders connected TSMC. Besides, we hold with TSMC’s presumption connected affirmative drivers of caller merchandise migration connected the 7/6nm node, specified arsenic Wi-Fi, RF and SSD controller ICs, aft the inventory rhythm successful 2023.
For much insights and analyses connected planetary foundry Market, delight notation to Infographic: Global Foundry Revenue Share | Q2 2022, which summaries our quarterly views connected exertion and vendor shares.
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