The Tame Apple Press is gobsmacked by the news because TSMC is making Jobs' Mob's 3nm technology and should be rolling in orders because everyone wants to own an iPhone, even those who don't.
DigiTimes said that TSMC's utilisation rate is expected to experience a significant drop in the first quarter of the year due to a 15 per cent reduction in orders from leading customers. Almost all of TSMC's clients are expected to experience a downturn and will need to reduce orders in the first quarter of 2023, leading to a significant decline in TSMC's utilisation rate. This will affect all of TSMC's production lines, including those that use 7nm, 6nm-class technologies (N7-capable lines), which are expected to only be using half capacity in early 2023.
TSMC's N5/N4-capable lines, which are typically used to produce advanced products like smartphone SoCs, are expected to be underutilised. The report also indicates that even TSMC's N28-capable fabs, which have been flat out since the beginning of the chip deficit in early 2021, will experience underutilisation. The decrease in demand for advanced handsets in the first half of the year is likely contributing to this trend as popular products like the iPhone usually launch towards the end of the year.
Several factors, including a slowing economy in China due to COVID-related lockdowns and reduced demand for many products worldwide, have led to a decrease in the procurement of new chips from companies like AMD, Intel, MediaTek, and Nvidia by large computer hardware, PC, and smartphone manufacturers. As a result, fabless chip designers have reportedly been forced to cut their orders to TSMC.
DigiTimes estimates that TSMC's sales for the first quarter of 2023 will decrease by 15 per cent quarter-over-quarter. This is in contrast to the first quarter of 2022, when TSMC's revenue exceeded its revenue for the fourth quarter of 2021 by 12.1 per cent.