TSMC boss tells investors everything's fine, that ten percent revenue drop is a blip
Taiwan's silicon titan races to ready 2nm process
Taiwan Semiconductor Manufacturing Co's leadership is optimistic that semiconductor demand will rebound in the second half of 2023, but not before revenues slip further.
During the company's annual shareholder's meeting on Tuesday, CEO CC Wei warned that revenues could slip by as much as 10 percent year over year during the first half of 2023, Reuters reports. Dr Wei was more optimistic about performance for the second half of the year, and 2024.
TSMC's wariness comes as the global semiconductor market stabilizes following years of supply chain challenges complicated by the COVID-19 pandemic, which drove a nearly insatiable demand for chips even as it became harder to move goods around the world.
Demand for chips has since eased as order backlogs were filled, demand for GPUs deflated along with enthusiasm for cryptocurrency, and consumers put away their wallets due to rising inflation and the threat of a recession.
While memory vendors predicted the changing market conditions for months, it wasn't until April that these trends worked their way down the supply chain to TSMC, which saw its revenues slide for the first time in four years.
However, it looks like at least some of TSMC's long term growth will come from higher prices. This week DigiTimes reported that TSMC could raise prices by between three and six percent for its most advanced products, with the bump to start in January 2024.
TSMC has increased prices before, with hikes of 20 percent reported during the worst of the semiconductor shortage.
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European Expansion looks 'good'
Despite the recent downturn in demand, nearly every foundry operator has announced vast expansions to their operations. Many have announced plans to open presences in countries or regions they've not previously inhabited.
TSMC is no exception, having been among the first to announce new US fabs back in 2020. The company has since announced plans to triple its investment in the state of Arizona and construct a second fab at the site. The bill for those efforts is expected to reach at least $43.5 billion.
During the company's shareholder meeting this week, TSMC Chairman Mark Liu, said that "so far the feeling is good," with regard to a German fab, despite supply chain and labor challenges.
TSMC execs have frequently cited to higher manufacturing and construction costs as a negative factor when considering expansion beyond the company's home in Taiwan. Despite those concerns, the company seems interested in breaking into Europe, if local governments are willing to shell out enough cash.
As we reported in early May, the facility TSMC is reportedly considering in Saxony, Germany, could cost as much as $11 billion (€10 billion), and will focus on the production of mature 28-nanometer parts for the automotive sector. NXP Semiconductor, Bosch, and Infineon are said to be involved in the project.
Racing to 2nm
While TSMC may not end up producing leading edge chips at the German site, a new report by Taiwan-based newspaper United Daily News indicated the company is racing to ensure its 2nm process node launches on time.
Slated for mass production in 2025, TSMC's 2nm process will use gate-all-around (GAA) transistors, replacing the FinFET transistors the Taiwanese titan currently employs. Samsung and Intel already use GAA tech.
These changes are expected to drive a considerable uplift in performance and efficiency the N3E node TSMC plans to deploy this year. As we reported last month, TSMC says its 2nm node will use roughly 30 percent less power for the same performance.
TSMC will, however, face stiffer competition than it contended with for prior process launches. Both Samsung and Intel are slated to launch 2nm, or 20 Angstrom nodes, in 2025. ®