TSMC’s production capacity utilization rate in 2023Q1 has dropped to around 75%
Recently, due to the continuous supply and demand reversal in the market, TSMC, one of the leading companies in the semiconductor industry, seems to be struggling. The utilization rate of the 6nm and 7nm process in the first quarter of 2023 has dropped more than expected and has been impacted by multiple customers canceling orders. Additionally, the demand for TSMC’s 4/5nm processes and mature process nodes using 8-inch wafers is also lower than expected.
According to a report from Digitimes, TSMC’s overall capacity utilization rate experienced a significant decline in the first quarter of 2023 due to the drag from the 6nm and 7nm process, falling to around 75%. However, the market expects that the rate will stop falling in the second quarter and slowly recover. On one hand, this will be due to new orders from companies like Apple and Nvidia, and on the other hand, foundry prices rising by 6% will also contribute to TSMC’s performance in the first half of the year.
Regarding advanced processes, TSMC’s 6nm and 7nm process capacity utilization rate had already dropped to below 90% by the end of the third quarter of last year. After multiple clients such as MediaTek and AMD cut orders, it fell to 60% in November and will be less than 40% by the end of this month. The decline of the 4nm and 5nm processes has also become more pronounced month by month. The capacity utilization rate was still 100% in October of last year but has now dropped to 75%. On the other hand, the 3nm process, with a price of $20,000, has performed unexpectedly well. The performance has improved month by month, with a capacity utilization rate of only about 20% at the end of December, but approaching 50% this month, and both production and yield rates have exceeded expectations, which is mainly due to orders from Apple.
With the help of capacity utilization rate recovery and an overall 6% price increase, TSMC’s performance in the first half of this year is expected to show narrower declines and better performance than previously expected by the market.
