TSMC’s top 10 customers have reportedly cut their orders
TSMC’s top customers are lowering their orders, signalling a difficult time for the semiconductor market
TSMC is the world’s largest producer of leading-edge semiconductors, and the utilization rate of their fabs are now expected to drop significantly as the world’s demand for high-end silicon declines. This decline has been caused by economic downturns across the globe, affecting China, the US, Europe, and most other major economies.
Digitimes has reported that TSMC’s top ten customers have cut their planned orders for 2023, a shift that will dampen TSMC’s profitability this year. TSMC has recently started to mass produce 3nm silicon for its customers, and demand for this node appears to be high.Â
TSMC’s customers appear to be cutting orders for some of the company’s higher-end lithography nodes, though the company’s newer 4/5nm nodes appear to remain at high levels of utilisation. TSMC’s 6nm and 7nm nodes are said to be getting hit hardest by cutbacks, with utilisation rates being expected to drop to as low as 50% this year. This makes a lot of sense, as most current-generation products from TSMC’s customers are currently being made using newer 4nm or 5nm nodes. Â
With the world’s economy being so troubled, it makes sense that high-end consumer electronics manufacturers are starting to produce less. When people are wary of spending money, they are less likely to buy new graphics cards, high-end smartphones, or other electronics. This hurts the semiconductor market as a whole, and could make it harder for TSMC to continue investing in new fabs and more advanced lithography technologies.
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