Intel Orders Delayed, TSMC Slows Three-Nanometer Expansion, Says TrendForce

4 August 2022 Accor짯ding to Trend짯Force rese짯arch, Intel plans to out짯sour짯ce the tGPU chip짯set in Mete짯or Lake to TSMC for manu짯fac짯tu짯re. Mass pro짯duc짯tion of this pro짯duct was initi짯al짯ly plan짯ned for 2H22 but was later post짯po짯ned to 1H23 due to pro짯duct design and pro짯cess veri짯fi짯ca짯ti짯on issues. Recent짯ly, the product셲 mass pro짯duc짯tion sche짯du짯le has been post짯po짯ned again to the end of 2023 for some reason, nigh com짯ple짯te짯ly can짯cel짯ling 3nm pro짯duc짯tion capa짯ci짯ty ori짯gi짯nal짯ly boo짯ked in 2023 with only a mar짯gi짯nal amount of wafer input remai짯ning for engi짯nee짯ring verification.

Trend짯Force indi짯ca짯tes that this inci짯dent has great짯ly affec짯ted TSMC셲 pro짯duc짯tion expan짯si짯on plan, resul짯ting in Apple being the one com짯pa짯ny among the first wave of 3nm pro짯cess cli짯ents from 2H22 to the start 2023 with pro짯ducts inclu짯ding M series chips and A17 Bio짯nic. In view of this, TSMC has deci짯ded to slow the pro짯gress of its pro짯duc짯tion expan짯si짯on to ensu짯re pro짯duc짯tion capa짯ci짯ty is not exces짯si짯ve짯ly idle, lea짯ding to mas짯si짯ve cost amor짯tiza짯ti짯on pres짯su짯re. In addi짯ti짯on to for짯mal짯ly noti짯fy짯ing equip짯ment sup짯pli짯ers of the company셲 inten짯ti짯on to adjust 2023 equip짯ment orders, due to the high cost of 3nm expan짯si짯on, Trend짯Force expects that this move will also affect some parts of TSMC셲 2023 CapEx plan짯ning. As a result, the sca짯le of TSMC셲 CapEx in 2023 may be lower than in 2022.

It is worth men짯tio짯ning, alt짯hough Intel has signi짯fi짯cant짯ly adjus짯ted its 2023 out짯sour짯cing plan, caus짯ing TSMC to post짯po짯ne its 2023 expan짯si짯on plans, loo짯king at other advan짯ced pro짯cess cli짯ents inclu짯ding AMD, Media짯Tek, and Qual짯comm, all of the짯se com짯pa짯nies suc짯ces짯si짯ve짯ly plan to mass-pro짯du짯ce 3nm pro짯ducts in 2024. At the same time, Apple셲 new 2024 iPho짯ne is expec짯ted to ful짯ly adopt 3nm pro짯ces짯sors. The intro짯duc짯tion of the afo짯re짯men짯tio짯ned cli짯ents will inject momen짯tum into TSMC셲 3nm capa짯ci짯ty uti짯liza짯ti짯on and reve짯nue per짯for짯mance in 2024.

Trend짯Force belie짯ves, alt짯hough TSMC has deci짯ded to curb its CapEx in 2023 due to the delay of Intel pro짯ducts, TSMC셲 annu짯al reve짯nue will still grow com짯pared with 2022 but at a slower rate. The reduc짯tion in CapEx can also reli짯e짯ve TSMC셲 huge cost amor짯tiza짯ti짯on pres짯su짯re and redu짯ce the degree of gross pro짯fit dilu짯ti짯on in the ear짯ly stage of 3nm mass production.

Loo짯king for짯ward to 2024, with new pro짯ducts from cli짯ents such as AMD, Media짯Tek, and Qual짯comm in place, 3nm pro짯cess out짯put is expec짯ted to be on track, fur짯ther pro짯mo짯ting strong growth in TSMC셲 reve짯nue sca짯le. Howe짯ver, the deve짯lo짯p짯ment sta짯tus of Intel셲 own Intel 4 pro짯cess and the accom짯pany짯ing out짯sour짯cing situa짯ti짯on are still important poten짯ti짯al growth dri짯vers for TSMC. If Intel 4 fails to mass-pro짯du짯ce as sche짯du짯led, Intel may out짯sour짯ce its com짯pu짯ting tiles to TSMC, stron짯gly dri짯ving growth in 2024. Howe짯ver, if the Intel pro짯cess deve짯lo짯ps smooth짯ly, the짯re remains the pos짯si짯bi짯li짯ty of the com짯pa짯ny choo짯sing to manu짯fac짯tu짯re rela짯ted pro짯ducts its짯elf and can짯ce짯ling TSMC셲 orders.

For more infor짯ma짯ti짯on on reports and mar짯ket data from TrendForce셲 Depart짯ment of Semi짯con짯duc짯tor Rese짯arch, plea짯se click here, or email Ms. Lat짯te Chung from the Sales Depart짯ment at lattechung@trendforce.com

For addi짯tio짯nal insights from Trend짯Force ana짯lysts on the latest tech indus짯try news, trends, and fore짯casts, plea짯se visit our blog at https://insider.trendforce.com/