TSMC responds to reports of slippage in advanced chipmaking technology

TSMC responds to reports of slippage in advanced chipmaking technology
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Taiwan Semiconductor Manufacturing Company (TSMC) has claimed that its leading edge 3 nanometer (nm) chip manufacturing process is suffering from technology delays. Earlier today reports from research firms TrendForce and Isaiah Research said TSMC’s 3nm process would face delays and affect the company’s partnership with US chip giant Intel Corp – which itself has been plagued by production problems for years.

TSMC’s response was standard boilerplate as the company declined to comment on its customer orders and outlined that manufacturing technology was proceeding on schedule.

TSMC insists that capacity expansion plans are on schedule after the hiccup report

Both reports are the latest in a series of news that have cast doubt on TSMC’s 3nm manufacturing plans. It was when the first bit of news came earlier this year Initially rumoursAnd then confirmed that Korean chipmaker Samsung Foundry will begin 3nm production ahead of TSMC.

Statements made by TSMC chief Dr. CC Wei outlined what his company will do Start making 3nm chips In the second half of this year. As TSMC seeks to maintain the technological expertise that has made it the world’s largest contract chip maker.

Report by TrendForce Shares that the firm believes delays in 3nm production for Intel will hurt TSMC’s capital spending as it could cut costs in 2023. It also didn’t shy away from placing some of the blame on Intel, claiming that the design was issued early. Production is due to move from 2H 2022 to 1H 2023 – which has now been delayed to late 2023.

That in turn has affected TSMC’s capacity utilization estimates – and is wary of idle capacity as the firm struggles to collect 3nm orders. TrendForce also shared that Apple will be the first 3nm TSMC customer – with the release of products next year, and AMD, MediaTek and Qualcomm will mass produce 3nm products in 2024.

A 5nm AMD CPU manufactured by TSMC.

Isaiah Research was more forthcoming with the specifics of the delay, as it initially shared the number of wafers expected to be manufactured and the decline after the alleged delay. Isaiah outlined that TSMC initially planned to produce 15,000 to 20,000 3nm wafers per month by the end of 2023 but has now scaled back to 5,000 to 10,000 wafers per month.

However, the research firm was optimistic in addressing remaining overcapacity concerns due to downsizing as it noted that most equipment (80%) for advanced manufacturing processes such as 5 nanometers and 3 nanometers is interchangeable, implying that TSMC maintains the ability to use it for other customers. .

TSMC’s response to the whole matter, sent to Taiwanese publication United Daily News, was brief with the firm Mention that:

“TSMC does not comment on the business of individual customers. The company’s capacity expansion projects are proceeding as planned.”

The semiconductor industry, which is currently facing a historic downturn due to a demand-supply mismatch in the wake of the coronavirus pandemic, has been considering capacity and capital spending cuts for quite some time. Chinese foundries have lowered their average selling prices (ASPs), and Taiwanese chipmakers have begun offering different prices for different nodes to avoid dampening demand.

TSMC, however, has made no such announcement, and the question of balancing capacity cuts with rising demand, especially for new products, remains a thorn in the side for chipmakers, as at one end they risk overspending on idle machines and on them. Another is to reduce revenue capture in terms of demand pickup.

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