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Taiwan Semiconductor Manufacturing Company (TSMC) has responded to a report alleging delays in its cutting-edge 3 nanometer (nm) chip manufacturing process technology. Today’s report from research firms TrendForce and Isaiah Research outlined that TSMC’s 3nm process faces delays, affecting the company’s partnership with US chip giant Intel Corporation, which itself has been in production for several years. I was suffering from the problem of
TSMC’s response was standard boilerplate, as the company declined to comment on customer orders and outlined that manufacturing technology was on schedule.
TSMC stresses capacity expansion plans on schedule after issue reports
The two reports are the latest in a string of news that have cast doubt on TSMC’s 3nm manufacturing plans. The first news came earlier this year when it was first rumored, and then it was confirmed that Korean chipmaker Samsung Foundry would start production of his 3nm before TSMC.
According to a statement from TSMC chief Dr. CC Wei, his company will begin manufacturing 3nm chips later this year. TSMC is trying to maintain the technology that has made it the world’s largest contract chip maker.
A TrendForce report shared that the company believes that Intel’s 3nm manufacturing delays will hit TSMC’s capex spending as it could cut spending in 2023. This initially caused production to be skipped from H2 2022 to H1 2023, but now it has been postponed to late 2023.
This has impacted TSMC’s capacity utilization estimates. The company is wary of capacity going idle as it struggles to source 3nm orders. TrendForce also shared that Apple will be the first customer for his 3nm TSMC. The products will launch next year, and AMD, MediaTek, and Qualcomm will mass-produce his 3nm products in 2024.
Isaiah Research got closer to the details of the delay as it shared the number of wafers originally scheduled for production and the decline after it was delayed. Isaiah said TSMC originally planned to mass produce 15,000 to 20,000 he 3nm wafers per month by the end of 2023, but now he plans to produce 5,000 to 10,000 per month. It has been reduced to one wafer and outlined.
However, to address concerns about reserve capacity left by the cuts, the research firm remains optimistic that the majority (80%) of equipment for advanced manufacturing processes such as 5-nanometer and 3-nanometer is redeemable and TSMC’s ability to make use of it for other customers.
TSMC’s response to the entire incident, which was sent to Taiwanese publication United Daily News, was brief, the company said:
“TSMC does not comment on individual customer business. The company’s capacity expansion projects are proceeding as planned.”
The semiconductor industry, currently facing a historic downturn due to the supply and demand mismatch caused by the coronavirus pandemic, has long considered reducing production capacity and capital expenditures. Chinese foundries are slashing average selling prices (ASP), and Taiwanese chip makers are starting to offer different prices for different nodes to avoid dwindling demand.
However, TSMC has made no such announcement, and the issue of balancing capacity reductions with demand recovery remains a thorny problem for chip makers, especially for new products. Another is to reduce revenue capture when demand increases.
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