American chips are having a hard time, cutting orders is increasing, and TSMC's advanced process research and development is difficult to sustain
Due to the difficult situation of semiconductor companies in the United States, it is reported that they have put pressure on TSMC to cut prices, thereby interrupting TSMC's development progress in high-end processes, and TSMC has to reflect on its future development direction.
Among the semiconductor companies in the United States, in addition to Apple and AMD's good performance, Nvidia, Qualcomm, Intel, are also gloomy, Nvidia's profit in the second quarter fell by 19%, Qualcomm **2%, and Intel in the United States lost money for the first time in 20 years.
TSMC's largest customer is semiconductors in the United States, which contribute nearly 70% of TSMC's profits, so they asked TSMC to cut prices, because TSMC relies heavily on American chips and technology, and TSMC is likely to give in to it.
TSMC's investment in the 3 nm process has not made any progress, originally the main customers of the 3 nm process are Intel and Apple, but Intel had to give up TSMC's 3 nm process because of the failure of the GPU chip, and Apple had to postpone the 3 nm process to the N4 process because of the 3 nm process, and there are even reports that TSMC cannot use M3 because of the limitations of the 3 nm process, and can only use TSMC's N3E process.
Because there are too few orders for the N3 process, TSMC decided to suspend production, but instead focused most of its energy on the N3E process to ensure that the N3E process can keep up with Apple's M3 processor, as well as the performance of the N3E process, so that TSMC cannot withstand such an impact.
In fact, TSMC has also been affected, the reason why TSMC can still maintain a high output is because the production of A16 chips has reached its peak, but AMD and Nvidia's cut orders have made TSMC very worried, so TSMC believes that with the mass production of A16 chips, there will be a serious overcapacity of 4nm and 5nm chips, and in order to save energy consumption, they will stop producing some EUV lithography machines before the end of this year. In order to save energy, Samsung has made the decision to stop production of some extreme ultraviolet lithography machines by the end of this year.
In the second half of this year, the discontinuation of some EUV lithography machines will have a greater impact on TSMC, but the long-term negative effects are likely to break TSMC's investment in advanced processes and obtain more benefits.
For TSMC, the more advanced the process, the more huge the capital required, and TSMC's 3 nm process, before mass production, they can spend a lot of money on the production of N3E chips, but once the N3E process is delayed, won't it burn money again?With the current process level above 3 nm, the cost alone is as high as billions of dollars, and even the most expensive company cannot withstand such a toss.
Coupled with the subsidies of the American factory to TSMC, TSMC was forced by the pressure of the United States to set up a factory of up to 12 billion US dollars in the United States, but at the same time, TSMC also had to stop production of some EUV lithography machines, and the American factory was also postponed to 5 nm, once mass-produced, it will cause greater production capacity, and TSMC in the United States cannot afford Taiwan's production capacity!Suffice it to say that from a manufacturing point of view, TSMC's chip factories in the United States are loss-making.
TSMC is now in an embarrassing situation, the production base in the United States has begun to start, but their 3 nm process technology, not only has not been recognized by any user, but also needs a lot of money to study the N3E and 2 nm process, the development of each process requires a lot of money, and it is very likely that nothing will be obtained, which means that even if it agrees to the requirements of the United States, it will have to take greater risks, which is unexpected by TSMC.