In the face of the top ten customers cutting orders at the same time, especially the big factories such as MediaTek, AMD, Intel and NVIDIA, TSMC‘s operating performance will begin to reflect the market situation of high inventory and low demand in 2023. It is estimated that the overall capacity utilization rate will fall significantly in the first quarter, dropping to 50% at 7/6nm, and the full load of 5/4nm and 28nm in the third quarter will also be significantly loose.
In addition, as many customers cut orders, delayed pulling goods, and broke contracts, TSMC also negotiated with customers on terms. In addition to accepting compensation, it was also willing to accept the contract exchange or long contract commitment of key customers, which made the stacking of wafer banks reach a new high. It was roughly estimated that the revenue in the first quarter would decrease by 15% quarter by quarter. If it did not increase by 6% in 2023, the decline in revenue would expand.
Wei Zhejia, president of TSMC, said frankly that the semiconductor inventory reached its peak in the third quarter of 2022, and the inventory began to be revised in the fourth quarter. It is expected that the capacity utilization rate will fully recover in the first half of 2023 and the second half of 2023.
In other words, the original market consensus is that the current de stocking will continue until Q2 2023, and the demand will start to warm up and come out of the bottom in the second half of the year.
However, some conservative voices have been pouring out recently. Some people in the industry are worried. After considering the three major variables of supply chain inventory level, industrial order and the overall global economic environment, they think that the supply and demand will not improve significantly in the third quarter of next year, and even will be extended to 2024 to usher in a meaningful recovery.
Source: Network
As for the adjustment of inventory, a semiconductor supervisor in the industry analyzed that this boom was different from the past, including the imbalance of industrial order caused by many factors such as MY war, epidemic situation and war. In the early optimistic atmosphere, everyone lost the sense of crisis and did not think that there was an "oversold" problem. After the terminal demand froze sharply and a wrong symptom was found, the IC design factory could not immediately step on the brake in the wafer factory, and the stock pressure cooker exploded.
He said that in addition to their own inventory, chipmakers are also trying their best to go to the agent channel stores, and at the same time let the wafer and packaging and testing plants stack their inventory. At present, the wafer factory and packaging and testing plant "Wafer Bank (customer consignment inventory)" has exceeded its load, and the situation is very chaotic, so it is impossible to accurately determine the actual situation of the current inventory.
Moreover, in the past, during the downturn of the boom, a wave of price cuts was usually launched to stimulate demand. However, most manufacturers still adhere to the price, with only sporadic price adjustments, which is not comprehensive, mainly because demand is too weak and inventory is too high. Even if the price is reduced, a large number of orders cannot be exchanged. In addition, the price of raw materials is still at a high level, so it is meaningless to reduce the price. Therefore, the strategy of "you don‘t move, I don‘t move" is adopted to make this wave of inventory adjustment more difficult.
It is worth mentioning that, in addition to the problems faced by the wafer foundry led by TSMC, such as high inventory, the storage IDM factory faces the most problems. Not only does the spot price and contract price of storage chips fall all together, but also the continuous rise of inventory has led many large factories to reduce expenditure by means of layoffs and production cuts.
According to the latest news from Korean media, SK Hynix will reduce the number of its internal teams by 20% to 30%, and in the latest organizational restructuring, a younger senior manager has been appointed as the new team leader. SK Hynix also offered paid retirement to senior executives in this process, but most of them refused this proposal.
On the other hand, Micron announced that it would reduce its capital expenditure to US $7-7.5 billion in 2023, which was originally planned to be US $12 billion, and its investment quota would be substantially reduced by nearly 40%. At the same time, the wafer output of NAND Flash and DRAM will be reduced by 20%. In addition, Micron also announced a 10% global layoff, which is expected to cut 4800 employees.
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