According to the latest report, since the beginning of this year, the demand for consumer electronic products such as PCs, mobile phones, and TVs has dropped sharply, resulting in the accumulation of a large amount of inventory throughout the supply chain. Therefore, many manufacturers began to cut orders to upstream suppliers until it affected foundries.
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Some IC designers said that although the upstream and downstream supply chains have released a lot of inventory recently, the worst has not yet been reached, and it is still relatively difficult for manufacturers to restructure and recover. The source said that it is estimated that in the fourth quarter, due to customers’ delay in purchasing and cutting orders, foundry orders will continue to shrink. And the order cut will be mainly aimed at wafer foundries that are not long-term cooperation, such as GlobalFoundries (GF), PSMC, and so on.
The IC designer said that in the second half of 2021, many upstream manufacturers believe that the market in short supply will continue until the end of 2023. In order to ensure the supply of goods, these upstream manufacturers have booked a large number of orders. However, the sudden drop in market demand caused upstream manufacturers to accumulate a large amount of inventory in the second quarter of this year. In order to alleviate the inventory, these manufacturers began to renegotiate the order volume with the foundries or even directly defaulted.
In addition, this order cut did not affect TSMC, mainly because many upstream manufacturers were worried that after cutting off TSMC’s orders, it would be difficult to obtain TSMC’s foundry. At present, the capacity utilization rate of TSMC’s advanced processes below 7 nanometers is still as high as 90%, while mature processes such as 22/28 nanometers have been in short supply.
TSMC released its July 2022 revenue report on August 10. The report shows that TSMC’s consolidated revenue in July was about NT$186.763 billion, an increase of 6.2% from the previous month and a new record high. In addition, TSMC estimates that its consolidated revenue for the third quarter will be between $19.8 billion and $20.6 billion.
