AMD announced yesterday that its revenue in the third fiscal quarter of 2022 will be lower than the previous quarter's expectations. As a result, Taiwanese semiconductor analyst Lu Xingzhi pointed out that the announcement will make forecasting TSMC's revenue more difficult.
TSMC is currently the world's largest chip foundry, and its partnership with AMD has proven to be key to the latter's regular delivery of technologically advanced products to the market. Analysts said several of TSMC's HPC customers are skeptical about market demand in the coming months.
AMD's preliminary third-quarter earnings report focused on slowing growth in its consumer products. Before the report, the company had expected to bring in $6.7 billion in revenue, but revenue would be $1.1 billion lower than expected, currently at $5.6 billion, largely due to lower desktop and laptop CPU sales.
TSMC's September revenue was NT$208 million, a year-on-year increase of about 36%, but a month-on-month decrease of 5%. The increase was mainly due to the strengthening of the dollar, thus benefiting non-U.S. exporters such as TSMC.
Lu Xingzhi believes that as the semiconductor industry grapples with supply chain issues and an economic slowdown, TSMC's orders and revenue next year will become unpredictable, and current major players of TSMC's customers are not aware of the demand for its products this quarter.
It also injected new uncertainty into AMD's fortunes, as preliminary earnings results showed its data center business was a bulwark despite declining personal computing revenue and delivered a strong 45% annual growth rate. However, sequential growth of 8% suggests that the data center segment may also be slowing, as higher inflation limits companies' ability to upgrade hardware. The data center segment has proven itself to be one of the company's strongest businesses this year.
Analysts believe that the uncertainty of high-performance computing has also raised questions about TSMC's 2023 revenue, which is also a concern of several investment banks. For example, Goldman Sachs believes that capacity utilization for TSMC's 7nm and 6nm process technologies is declining, and a potential drop in orders will also cause the chipmaker to end the quarter with flat revenue growth.
Rising costs have forced TSMC to raise prices even as orders dwindled, and those effects will be reflected in another increase in revenue next year as new orders are filled. Rising prices have also slowed the company's adoption of new technologies and lengthened the time it takes for the company to recover capital expenditures.
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