Taiwan Semiconductor Manufacturing Company (TSMC) is expected to see an increase of NT$100 billion in its sales of 5/4nm chips this year, according to industry sources. Although the revenue growth for the year is expected to be roughly the same as the previous year, the 5/4nm chip sales are expected to boost TSMC's performance. The company's 28nm process is currently the only process that is operating at 95% capacity, while 16/12nm capacity utilization rates are also expected to reach around 80% in Q1 and H2 2023.
Slow demand for 7nm and 6nm chips
The demand for 7nm and 6nm chips is currently slowing down due to the weakening of terminal markets such as smartphones and PCs. The company previously stated that the capacity utilization rate of 7nm and 6nm will decline from the first half of 2023 to the second half due to delays in customer product progress and continued inventory depletion. However, the demand for the 7nm family is expected to slowly pick up in the second half of the year.
Capacity utilization rate decline since Q4 2022
Since Q4 2022, TSMC's capacity utilization rate for various processes has declined significantly due to customers' continuous revision of orders and film releases. The capacity utilization rate of the 8-inch plant Fab 3/4 and Fab 5 is estimated to have dropped to 70-75% from 0.5% in Q2. Meanwhile, Fab 6 and Fab 8 remained at 75-80%. The capacity utilization rate of Fab 14B, which is mainly based on 16/12nm, is expected to drop to 50% in May and June due to major customer corrections.
Fab 18A and Fab 18B
Fab 18A, which is mainly based on 5/4nm, has a monthly production capacity of about 130,000 pieces, and the capacity utilization rate in the first half of the year is about 75%. Meanwhile, Fab 18B, which has entered mass production at 3nm, has a monthly production capacity and capacity utilization rate in the first half of the year of about 45,000-50,000 pieces and 80-85%, respectively. The monthly production capacity is expected to reach 60,000 pieces in the second half of the year.
TSMC's revenue in January and February 2023
TSMC's consolidated revenue for February 2023 was approximately NT$163.174 billion, a decrease of 18.4% from the previous month but an increase of 11.1% from the same period last year. The cumulative revenue for January and February was approximately NT$363.225 billion, an increase of 13.8% over the same period last year. In January 2023, TSMC's revenue was about NT$200.05 billion, a month-on-month increase of 3.9% and a year-on-year increase of 16.2%.
TSMC's President Wei Zhejia's statement
TSMC's President Wei Zhejia stated that due to the downturn in the personal computer and smartphone markets and the impact of customer inventory adjustments, TSMC's 7nm and 6nm capacity utilization rates are no longer at the high point of the past three years. It is estimated that it will take several quarters to adjust, and demand is expected to pick up in half a year.
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