Apple is stuck in the quagmire of "price reduction", and its excessive dependence on TSMC's 7nm has inspired deep reflection
TSMC has become the world's largest chip foundry with more than half of the global market share thanks to its extraordinary technological prowess and cutting-edge production capacity, thanks to its advantages as a technology R&D leader and a favored partner for tech giants.
However, as the globalization situation worsens, the challenges faced by TSMC have also become prominent. Initially, TSMC's customer base consisted of two major customers, Apple and Huawei, but with the gradual strengthening of the U.S. sanctions policy on Huawei, TSMC's customer structure has also changed a lot.
Today, TSMC only has one major customer, Apple, which almost determines TSMC's"Life and death"After all, Apple alone contributes more than a quarter of TSMC's revenue.
Before the U.S. sanctions, Huawei was also one of TSMC's major customers, contributing more than 30 billion yuan in revenue to TSMC every year.
Huawei's order growth rate has surpassed Apple's, but in the face of US sanctions, TSMC had to give up Huawei's orders"Life and death together"for U.S. businesses.
It can be seen from the data released by a third party that Apple is the company that contributes more than a quarter of TSMC's revenue, and the top four customers together are not as much as Apple's contribution.
This is precisely the reason why TSMC is in a passive situation.
According to foreign media reports, due to the decline in the utilization rate of TSMC's 7nm process, the only Apple production capacity has been unable to be fully consumed, and in order to alleviate the decline in capacity utilization, TSMC has to reduce prices**.
To this end, TSMC has lowered the ** range of the 7nm process by about 5% to 10%, but this measure still cannot solve the trend of declining revenue of the 7nm process.
Previously, TSMC made it clear that due to the sharp decline in shipments in the mobile phone market and the postponement of product launches by customers, which seriously affected the 7nm capacity utilization rate, the proportion of 7nm revenue in the third quarter continued to decline, from 23% in the second quarter to 17%.
The Huawei Mate60 series, which was suddenly unveiled at the end of August, is equipped with the Kirin 9000 produced by a factory in Chinese mainland, which continues to sell well, and there is a serious shortage after three months on the market.
What makes TSMC collapse even more is that the big sales of the Huawei Mate60 series have nothing to do with TSMC.
This is also the context of advanced technology being controlled by others, TSMC lost Huawei, a major consequence of the customer, without Huawei's adoption, the price reduction of the 7nm process is inevitable.
For TSMC, it is obviously no longer feasible to rely on American companies now, after all, Apple's latest iPhone 15 series has seen a sharp decline in sales compared with the previous generation, and in the final analysis, it is also a direct result of TSMC's continuous reduction in orders.
It can be said that TSMC's over-reliance on Western companies has led to such consequences.
The escalation of international tensions and some geopolitical uncertainties, which are too dependent on Western markets, will also make TSMC take more risks.
While in the short term, TSMC can increase revenue by reducing prices to improve capacity utilization, price reductions can also negatively impact TSMC's profitability and long-term sustainability.
The semiconductor industry in Chinese mainland continues to grow, and in the highly competitive market environment, TSMC may also face greater profitability challenges, so TSMC must carefully weigh the strength of short-term order growth and long-term profitability.
On the whole, TSMC's decision to reduce prices is not only a response to the current market situation, but also a reflection of the risks and challenges of the globalization of the semiconductor industry.