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The Taiwan Semiconductor Manufacturing Company (TSMC) has responded to reports that its cutting-edge 3-nanometer (nm) chip manufacturing technology is suffering from delays. Earlier today, reports from research firms TrendForce and Isaiah Research highlighted that TSMC’s 3nm process will face delays and affect the company’s partnership with US chip giant Intel Corporation – which itself is suffering from manufacturing problems for several years.
TSMC’s response was a standard boilerplate, as the company declined to comment on customer orders and stressed that manufacturing technology was proceeding on schedule.
TSMC stresses capacity expansion plans are on schedule following hiccup reports
The two reports were the latest in a series of news that cast doubt on TSMC’s 3nm manufacturing plans. The first news came earlier this year, when it was initially rumored and then confirmed that Korean chipmaker Samsung Foundry would launch 3nm production ahead of TSMC.
Statements from TSMC chief Dr. CC Wei said his company would start manufacturing the 3nm chips in the second half of this year. as TSMC seeks to maintain the technological prowess that has made it the world’s largest contract chipmaker.
TrendForce’s report shared that the company believes the delay in 3nm manufacturing for Intel will hurt TSMC’s capital expenditures, as it may end up cutting expenses in 2023. It also wasn’t shy about blaming Intel, saying the design issued initially jumped 1H 2023 manufacturing from 2H 2022 – which has now been postponed until late 2023.
This in turn has affected TSMC’s capacity utilization estimates – and the company is wary of unused capacity as it struggles to secure 3nm orders. TrendForce also announced that Apple will be TSMC’s first 3nm customer – with products to be released next year, and AMD, MediaTek and Qualcomm to mass-produce 3nm products in 2024.
Isaiah Research was more forthcoming with the details of the delay, as it shared the number of wafers originally supposed to be made and the decrease after the alleged delay. Isaiah pointed out that TSMC originally planned to produce 15,000-20,000 3nm wafers per month by the end of 2023, but that has now been reduced to 5,000-10,000 wafers per month.
However, responding to spare capacity worries left due to the reduction, the research company remained optimistic as it pointed out that the majority of equipment (80%) for advanced manufacturing processes such as 5 nanometers and 3 nanometers are interchangeable, which implies that TSMC retains the possibility of using it for other customers.
TSMC’s response to the whole matter sent to Taiwanese publication United Daily News was brief, with the company stating that:
“TSMC does not comment on the activities of individual customers. The company’s capacity expansion project is proceeding as planned.”
The semiconductor industry, which is currently facing a historic slowdown due to the mismatch of supply and demand following the coronavirus pandemic, has for some time been contemplating capacity cuts and capital expenditure. Chinese foundries have reduced their average selling prices (ASP) and chipmakers in Taiwan have started offering different prices for different nodes to ensure demand does not decrease.
TSMC, however, has made no such announcement, and the issue of balancing capacity cuts and a recovery in demand, especially for new products, remains a thorn in the side of chipmakers. , as on the one hand they risk overspending on idle machines and on the other, reducing revenue capture should demand pick up.
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