Report: TSMC takes action in response to falling demand

Report: TSMC takes action in response to falling demand

Market news |
By Peter Clarke

TSMC has cut orders to its suppliers by up to 40 to 50 percent, according to Taiwan’s United Daily News.

The cuts cover recycled wafers, key consumables, some manufacturing and packaging equipment and other fields but in a number of cases suppliers are relatively small and TSMC’s order cut is creating turmoil across the industry, UDN said.

It was reported earlier this month that TSMC had lowered its capital expenditure budget for 2022 from about $40 billion to about $36 billion. It is also reported that TSMC’s two main customers at 3nm – Apple and Intel – have delayed orders until 2023. UDN said Apple Mac computers equipped with M2 processors have been postponed to March next year.

As a result TSMC has opted to cut its monthly manufacturing capacity of the 3nm manufacturing process from 44,000 wafer starts per month to 10,000 wafer starts per month.

TSMC order weakness started in 3Q22 and has continued in 4Q22 and with respect to 1Q23. The impact on the back-end is larger than that of the front-end, UDN said.

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