TSMC’s Wafer Prices Soar Amid Semiconductor Downturn
Several days ago, TSMC disclosed its financial results for the fourth quarter of 2023, revealing that revenues reached NT$625.53 billion, virtually unchanged from the same period last year, yet marking a 14.4% sequential increase. Notably, shipments of the 3nm process technology constituted 15% of total revenue, a significant leap from 6% in the previous quarter.
Analysts have recently observed that the demand for chips has not reached historical peaks, with the industry overall experiencing a downturn. However, the average selling price (ASP) for TSMC’s 300mm wafers in the fourth quarter rose to $6,611, registering a 22% increase within a year, primarily due to the enhanced shipment volumes of the 3nm process. Indeed, the current growth in the semiconductor sector is largely attributed to price hikes rather than an uptick in chip shipments.
This assertion is supported by the shipment volumes from TSMC, the world’s leading foundry. Data for the fourth quarter of 2023 shows that 2.957 million 300mm wafers were shipped, a significant decrease of 20.1% from 3.702 million in the fourth quarter of 2022, marking the first time since 2020 that shipments fell below 3 million pieces. Yet, revenue remained stable. Concurrently, the average price for 300mm wafers surged from $5,384 to $6,611.
In TSMC’s terminology, processes such as 7nm and more advanced are referred to as leading-edge technologies. During the fourth quarter of 2023, the 3nm, 5nm, and 7nm processes accounted for 15%, 35%, and 17% of total revenue, respectively, cumulatively comprising 67% of sales, indicating that over two-thirds of revenue was generated from the sale of chips manufactured using the latest process technologies. The rise in quotations for the most recent process nodes has significantly propelled revenue growth in the semiconductor industry. As newer semiconductor manufacturing technologies emerge, TSMC’s foundry pricing is expected to escalate.
It’s noteworthy that revenues from chips for smartphones and high-performance computing each accounted for 43%, diverging from the past trend where smartphone SoCs dominated TSMC’s shipments. Additionally, revenue from automotive chips made up 5%, and chips for the Internet of Things contributed another 5%.
