Recently, it was reported that the capacity utilization rate of TSMC's 7nm process was less than 50%, and orders were urgently needed, so it had to reduce ** to win orders. However, since many manufacturers such as Apple, MediaTek, Qualcomm, NVIDIA, AMD, etc., lack interest in the 7nm process and prefer more advanced processes such as 5nm, 4nm, and 3nm, even price reductions will not attract them. For manufacturers such as automotive chips, most of the old processes such as 40nm and 28nm are still used, so they cannot afford chips with 7nm process. To sum up, TSMC is facing the problem of lack of orders for 7nm chips, and the solution to this problem is either to upgrade part of the 7nm production capacity to advanced processes, or downgrade to mature processes. However, although there is no market demand for TSMC's 7nm process, for Huawei, they urgently need 7nm chip production capacity.
Huawei is a world-renowned technology giant, and the 7nm process used in its Kirin 9000s chip, as well as a series of other chips, is one of the most advanced processes on the market. However, due to the lack of 7nm chip production capacity, Huawei's Mate60 series mobile phones are facing a situation where supply exceeds demand. In addition to the Kirin 9000S chip, Huawei's AI chips, the Ascend series and the Kunpeng chip, are also highly sought after by domestic manufacturers, and these chips also use the 7nm process. However, Huawei is currently facing a bottleneck in 7nm production capacity, resulting in AI chips, Kirin chips, and Kunpeng chips, which cannot meet market demand.
To solve this problem, Huawei needs to find other foundries to meet its own demand for 7nm chips. However, TSMC, as the world's leading chip foundry, cannot match Huawei's chips because it cannot OEM Huawei's chips, and the demand and production capacity of both sides cannot be matched. This problem highlights the dilemma of the semiconductor industry's global resource allocation. TSMC's Zhang Zhongmou once said that "semiconductor globalization is dead", which is precisely because of the inability to rationally allocate resources such as production capacity, orders and ** chains, resulting in a waste of resources and a huge impact on the semiconductor industry.
TSMC is one of the world's largest integrated circuit foundries, and its 7nm process was once seen as a key step in leading the industry. However, with the development of other processes and changes in demand, TSMC's 7nm process has gradually lost its market competitiveness. Originally, the 7nm process should be the first choice for high-performance chips, but now the market demand tends to be more advanced processes, such as 5nm, 4nm and even 3nm. This has left TSMC's 7nm process in a dilemma of insufficient demand, with a capacity utilization rate of less than 50%.
In order to solve this problem, TSMC had to lower ** to attract orders. However, even with the price reduction, many manufacturers are reluctant to adopt the 7nm process and prefer a more advanced process. On the other hand, some manufacturers, such as automotive chips, cannot afford the 7nm process because they are still using the older 40nm and 28nm processes.
In order to make full use of the capacity of the 7nm process, TSMC is faced with two options, one is to upgrade part of the 7nm capacity to more advanced processes, such as 5nm or 4nm, to meet the needs of the market;The second is to downgrade some of the 7nm capacity to more mature processes, such as 10nm or 14nm, to meet the demand for traditional processes.
However, despite the lack of competitiveness of TSMC's 7nm process in the market, Huawei is in dire need of 7nm chip production capacity. As the world's leading communications equipment manufacturer, Huawei's self-developed chips are highly sought after in the market. As Huawei's latest generation of flagship chips, the Kirin 9000S chip uses the 7nm process, so Huawei's demand for 7nm chips is very urgent.
Huawei's AI chips, the Ascend series and the Kunpeng chip, also use the 7nm process, and are warmly sought after by domestic manufacturers. However, due to the inability of 7nm chip production capacity to meet the demand, Huawei is facing the problem of insufficient power. It would be a win-win situation if the needs of both parties could be matched. However, because TSMC cannot OEM Huawei's chips, it has led to a situation where demand and production capacity cannot be matched.
Although TSMC's 7nm process currently lacks orders, and Huawei urgently needs the production capacity of 7nm chips, the two sides cannot reach a cooperation, resulting in a dilemma that demand and production capacity cannot be matched. One of the reasons is that the market demand tends to more advanced processes, such as 5nm, 4nm, 3nm, resulting in a lack of competitiveness in 7nm processes. Another reason is that some manufacturers, such as automotive chips, are still using older processes and cannot afford 7nm chips. To solve this problem, TSMC needs to find other orders to improve the capacity utilization of the 7nm process, while Huawei needs to find other foundries to meet its own demand for 7nm chips. This problem highlights the dilemma of the semiconductor industry's global resource allocation and the need to find better solutions to drive the industry forward. With the advancement of technology and the changing needs of the market, the semiconductor industry will still face many challenges and opportunities.