Huawei is TSMC's second largest customer, contributing more than 30 billion yuan in revenue to TSMC every year and maintaining a 14% growth rate. Not only that, Huawei's orders are basically advanced processes, sharing TSMC's first batch of 5nm chip production capacity with Apple

Huawei is TSMC's second largest customer, contributing more than 30 billion yuan in revenue to TSMC every year and maintaining a 14% growth rate.

Not only that, Huawei's orders are basically advanced processes. It shared TSMC's first batch of 5nm chip production capacity with Apple , and is also the largest customer of TSMC's 7nm process. After the rules such as

chips were modified, TSMC was unable to ship freely because it did not have permission, thus losing Huawei orders.

result Liu Deyin publicly stated on many occasions that the loss of Huawei orders will not affect TSMC, and the vacant production capacity will be filled by orders from other manufacturers.

Liu Deyin also said that Huawei's adjustment of inventory will not have an impact on TSMC. TSMC pursues technological leadership and building chip production lines with non-US technology is not the direction that TSMC is currently considering.

But unexpectedly, the situation is constantly changing now, and TSMC has also been affected.

knows that TSMC has long announced that this year's capital expenditure will reach between US$40 billion and US$44 billion. As a result, TSMC Connectivity has been lowered twice, the first time is lowered by US$4 billion, and the second is lowered by US$4 billion.

latest news says that after TSMC cuts capital expenditure twice, capital expenditure is expected to be US$36 billion this year, because the recent adjustment of semiconductor inventory has exceeded expectations.

After TSMC lowered its capital expenditure twice, foreign media Liu Deyin underestimated Huawei's orders for the following reasons.

First of all, after entering 2022, the chip production capacity of advanced processes has been overcapacity because sales of smartphones, PCs, etc. have declined, especially PC sales have basically fallen back to 10 years ago.

This directly leads to a reduction in chip demand for advanced processes, which directly affects TSMC's orders.

data shows that the capacity utilization rate of TSMC's advanced processes has dropped to about 90%, and some EUV lithography machines have even been turned off.

TSMC also encourages employees to take more vacations. In addition to R&D personnel of chips below 3nm, this is the result of TSMC's overly reliance on orders from Mechips, otherwise such a situation would not have happened.

Secondly, Huawei has begun to return to the king, and multiple data have proved this.

For example, Huawei established more than ten legions, and developed 5G ToB services first, with more than 3,000 contracts; Huawei's operator business achieved year-on-year growth in , becoming a very eye-catching presence in all Huawei's businesses.

Huawei has fully entered the automotive field. Huawei's technology-enabled Industries series has sold more than 10,000 in two consecutive sales. Yu Chengdong even publicly stated that the Industries series cars have the ability to sell 20,000 units per month.

The key is that Huawei has also opened up the domestic mobile phone industry chain, and new phones are constantly on the market. The first batch of Huawei Mate50 series of alone has exceeded 4 million units.

In other words, Huawei 5G ToB, Huawei automotive business, and Huawei mobile phone , etc. all require a large number of chips.

Finally, TSMC had long announced a 6% increase in the price of wafer foundry in 2023. As a result, Apple clearly expressed its opposition to the price increase, and Nvidia later expressed its opposition to the price increase, hoping to enjoy the same treatment as Apple.

In addition, on chips such as 3nm, Intel was originally sharing the first batch of production capacity with Apple, but there were reports that Intel decided to postpone the launch of 3nm chips, and the first batch of 3nm chip production capacity was exclusive to Apple.

This has led to TSMC further relying on Apple's orders, giving Apple more voice.

To sum up, Huawei's orders are huge and are growing rapidly. At the same time, Huawei's orders can also share the production capacity of the first batch of advanced processes with Apple's orders, so foreign media said that Liu Deyin underestimated Huawei's orders.