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Taiwan Semiconductor Manufacturing Company (TSMC) has responded to reports claiming that its cutting-edge 3 nanometer (nm) chip manufacturing process technology is suffering from delays. Earlier today, research firms TrendForce and Isaiah Research reported that TSMC’s 3nm process will face delays, impacting the company’s partnership with US chip giant Intel Corporation, which itself has been suffering from manufacturing issues for several years.
TSMC’s response was a default proposal as the company declined to comment on its customer orders and stated that the manufacturing technology was on track.
TSMC stresses that capacity expansion plans are on track following reports of hiccups
The two reports were the latest in a series of news stories that cast doubt on TSMC’s 3nm manufacturing plans. The first news came earlier this year when the time had come initially rumoredand then confirmed that Korean chipmaker Samsung Foundry will start 3nm production ahead of TSMC.
Statements by TSMC boss Dr. CC Wei has outlined that his company will do so Start making the 3nm chips in the second half of this year. as TSMC strives to maintain the technological prowess that has made it the world’s largest contract chip manufacturer.
Report by TrendForce shared that the company believes that the delay in 3nm manufacturing for Intel will impact TSMC’s capital expenditures as it could lead to a reduction in spending in 2023. It also wasn’t shy about blaming Intel for some, claiming that the issued design initially resulted in manufacturing being pushed back from 2H 2022 to 1H 2023 — which has now been pushed back to late 2023.
This, in turn, has impacted TSMC’s capacity utilization estimates — and the company is wary of capacity sitting idle while it struggles to secure 3nm orders. TrendForce also announced that Apple will be the first 3nm TSMC customer – with products launching next year, and AMD, MediaTek and Qualcomm will be mass producing 3nm products in 2024.
Isaiah Research was more open with the details of the delay, sharing the number of wafers originally expected and the drop after the alleged delay. Isaiah explained that TSMC originally planned to produce 15,000 to 20,000 3nm wafers per month by the end of 2023, but that number has now been reduced to 5,000 to 10,000 wafers per month.
However, acknowledging concerns about the spare capacity remaining due to the reduction, the research firm remained optimistic, pointing out that the majority of the equipment (80%) for advanced manufacturing processes such as 5 nanometers and 3 nanometers is interchangeable, implying that TSMC will keep it Ability to use it for other customers.
TSMC’s response to the entire affair, sent to Taiwanese publication United Daily News, was brief, with the company say that:
“TSMC does not comment on the business of individual customers. The company’s capacity expansion project is proceeding as planned.”
The semiconductor industry, currently facing an historic downturn due to demand and supply mismatches amid the coronavirus pandemic, has been considering capacity and investment cuts for some time. Chinese foundries have lowered their average selling prices (ASPs), and chipmakers in Taiwan have started offering different prices for different nodes to ensure demand doesn’t flag.
However, TSMC has made no such announcements, and the issue of balancing capacity reductions with an increase in demand, particularly for newer products, remains a thorn in the side of chipmakers, as on the one hand they risk overspending on idle machines and so on, and the other reduces the Revenue recognition in the event of an increase in demand.
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