TSMC responds to reports of slippage in advanced chip technology

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Taiwanese semiconductor manufacturer (TSMC) has responded to reports claiming that its cutting-edge 3nm (nm) chip-making technology is experiencing delays. Earlier today, reports from research firms TrendForce and Isaiah Research indicated that TSMC’s 3nm process would experience delays and affect the company’s partnership with US chip giant Intel Corporation – which itself has struggled with production issues for several years.

TSMC’s response was benchmarked when the company declined to comment on customer inquiries, stating that manufacturing technology was on track.

TSMC emphasizes that capacity expansion plans are on track after reported issues

The two reports were the latest in a series of news that have cast doubt on TSMC’s 3nm production plans. The first news came earlier this year, when it was initially also rumored to confirm that Korean chipmaker Samsung Foundry will start production of 3nm ahead of TSMC.

The statements from TSMC president Dr. CC Wei made it clear that his company will start making 3nm chips in the second half of this year. TSMC strives to maintain the technological prowess that has made it the world’s largest chip maker.

TrendForce Report He reported that the company believed the delay in manufacturing 3nm for Intel would hurt TSMC’s capital spending as it could cut spending in 2023. It was also not shy about blaming Intel, claiming that the released design was originally. first half of 2023 from the second half of 2022 – which has now been moved to the end of 2023.

This, in turn, has affected TSMC’s capacity utilization estimates – and the company is wary of being able to stand still as it struggles to buy 3nm orders. TrendForce also shared that Apple will be the first 3nm TSMC customer – with products launching next year, AMD, MediaTek and Qualcomm will be producing 3nm products by 2024.

AMD 5nm CPU built by TSMC.

Isaiah Research responded better with details about the slowdown, sharing the number of chips expected to be produced initially and the decline after the alleged slowdown. Isaiah explained that TSMC originally planned to produce 15,000 to 20,000 3nm wafers per month by the end of 2023, but this has now been reduced to 5,000 to 10,000 wafers per month.

Addressing concerns about remaining idle capacity due to the decline, the research firm remained optimistic, indicating that most equipment (80%) for advanced manufacturing processes such as 5nm and 3nm is replaceable, meaning TSMC retains the ability to use it to other customers.

TSMC’s response to the full issue sent to Taiwanese magazine United Daily News was brief with the company, saying:

“TSMC does not comment on individual customer activities. The project to expand the company’s capacity is progressing as planned.”

Currently facing a historic slowdown due to a supply/demand mismatch in the wake of the coronavirus pandemic, the semiconductor industry has been considering capacity cuts and capital spending for some time now. Chinese foundries have lowered average selling prices (ASPs) and Taiwanese chip makers have started offering different prices for different lots to ensure demand doesn’t fall.

However, TSMC has made no such announcements, and the issue of balancing capacity reductions with increased demand, especially for newer products, remains a thorn in the side of chipmakers as they risk spending too much on idle machines and on and on second, to reduce harvest income in case of increased demand.

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