Taiwan media "Electronic Times" reported that supply chain sources revealed that TSMC's top ten customers have been cutting orders since the third quarter, especially MediaTek, Nvidia to AMD to reduce the single rate or delay the pull strength is more than expected.
Sources pointed out that from the third quarter, TSMC's 8-inch and 12-inch mature process capacity utilization declined because dozens of customers in the notebook, cell phone and TV industry cut orders due to sluggish sales in the end market. Meanwhile, a significant reduction in 7nm chips also reduced capacity utilization for advanced processes, and customers for 5nm chips also reduced orders or adjusted shipments.
Sources said that among TSMC's top 10 customers, MediaTek, AMD, Nvidia, Marvell and STMicroelectronics have seen larger-than-expected order cuts and delayed delivery dates.
TSMC pointed out in a recent press conference that because of the weakness of smartphones and PCs and other end markets, as well as delays in customers' product schedules, TSMC's 7nm and 6nm capacity utilization will no longer be at the high point of the past three years starting in the fourth quarter, and this situation is expected to continue into the first half of next year, as semiconductor supply chain inventories will take several quarters to rebalance to a healthier level.
Previously, TSMC has adjusted its capital expenditures for 7nm and 6nm accordingly, including the withdrawal of the new 7/6nm production line at Plant 22 due to uncertain market demand and the adjustment of the Kaohsiung 7nm fab construction schedule. TSMC believes that the demand for 7nm and 6nm is more cyclical rather than a structural phenomenon and is expected to pick up in the second half of next year.
