Digitimes reports the drop was caused by slower than expected orders for high-end mobile chips, caused by soft demand for high-end mobile phones. Customers are playing it safe, so they are cutting their orders or decelerating the pace and which they place the orders.
The biggest drop apparently happened over the last few weeks. Such fluctuations were uncommon several years ago, but the smartphone market has its own rules. For example, while shipments of big GPUs tend to be relatively stable and often constrained by capacity soon after launch, smartphones are all about getting plenty of volume when the product is fresh and then scaling back the orders months ahead of new launches.
TSMC’s business isn’t going anywhere, but it is experiencing new seasonal trends. Seasonal underutilization could have a slight effect on long-term prices – if TSMC learns to live with ~10 to 20 percent drops on a regular basis, it might be forced to raise prices to compensate.
However, it also means TSMC could offer lower prices during the drought, so if you have a new SoC or GPU to build, now is your time to get in touch Morris Chang, he’ll appreciate it.