Recently, Taiwan media reported that TSMC may shut down some EUV lithography machines because of insufficient power supply in Taiwan Province. However, the deep-seated reason is that TSMC's advanced process capacity has begun to be seriously oversupply, resulting in it having to significantly reduce its advanced process capacity.
According to industry insiders, TSMC consumes a lot of power. In 2021, TSMC consumed 17 billion kWh, accounting for about 8% of the electricity consumed in Taiwan Province, which shows how much power consumption TSMC is. The EUV lithography machine has the largest power consumption among them. An EUV lithography machine needs to consume 10 million kilowatt-hours in a year.
Previously, due to TSMC's leading advantages in process processes such as 5nm, 7nm, 10nm, American chips paid extremely high prices. Even when global chip supply was insufficient at the end of 2020, automotive chip companies took the initiative to raise the price by 20%, but only asked TSMC to share more chip production capacity to them, making the lucrative profits allow TSMC to pay more money to buy electricity.
However, since this year, signs of global chip oversupply have emerged. The US RF and analog chip industries have seen high inventory, and they have cut prices and sold, with a maximum drop of nearly 90%. Recently, several major American chip companies such as AMD, NVIDIA, etc. have begun to cut orders, and at this time, American chip companies have begun to bear pressure. Under the pressure of
, American chips naturally need to control costs, and chip foundry prices are the first to be affected. After all, TSMC was under a strong position in the past two years, and the continuous rise in chip prices made TSMC profit. TSMC's performance showed that the net profit margin exceeded 40%, which is very rare among many industries around the world. Even if it is strong like , Apple , it only has a net profit margin of more than 20%. It is reasonable for American chips to require TSMC to lower prices.
Faced with the requirements of American chip companies, TSMC may have no choice, because nearly 70% of TSMC's revenue comes from American chips, and TSMC also uses a lot of American technology. Under such restraint, TSMC may have to accept the requirements of American chips to reduce prices.
However, TSMC has now reported that it will shut down some lithography machines before the end of the year, which means that the overcapacity of chips is probably more serious than expected, so that TSMC has to choose to shut down some lithography machines to significantly reduce production capacity and reduce operating costs. This also shows how much pressure the US chips put on TSMC.
Recalling the fact that TSMC has now expanded its 28nm process capacity, it is also more inferred that the severity of TSMC's reduction in advanced process capacity is likely to shrink rapidly because TSMC's revenue may shrink rapidly because TSMC has to expand its 28nm mature process capacity to make up for the losses of advanced processes.
mature process is favored because the cost of mature processes is much lower than that of advanced processes. Moreover, due to the transformation of packaging technology, it is expected to rejuvenate the mature processes. Chip companies in mainland China believe that chips produced with 14nm chip stacking technology can achieve the effect of the 7nm process. TSMC itself also produces chips with 7nm process plus self-developed 3D WOW packaging technology has achieved the effect of the 5nm process, which has enhanced the competitiveness of mature processes.
Review Not long ago, TSMC executives also said that because they mastered advanced process processes, TSMC will not be affected by the global oversupply of chips. However, just two months later, TSMC began to plan to shut down some advanced lithography machines to save operating costs. Such a huge change occurred in a short period of time. I am afraid its executives did not expect it?
