TSMC’s 7nm process technology will not be fully utilized in the first half of 2019 due to order cutbacks from several customers, according to an article from Chinese-language publication Commercial Times and reported by DigiTimes reported this week. This could leave some room for AMD and other chip makers to further increase their chip production and shipments in early 2019.
According to this report, TSMC’s 7nm process is expected to be utilized at only 80-90 percent of full capacity during the first six months of 2019. Apple, HiSilicon and Qualcomm have all cut their expected orders for the first half of 2019, according to the publication. TSMC has declined to comment on the reports.
Recent reports have claimed sales for Apple's latest iPhone have been much lower than expected, likely due to the company increasing price points even further this year. These events also coincide with Apple announcing that it will no longer disclose the number of units sold to investors, a first since the company introduced the iPhone a decade ago. This gives credence to the idea that Apple’s sales may continue to decline in 2019 if the company is unwilling to go back to previous price points for its devices.
Opportunity for AMD
AMD is expected to launch its next-generation CPUs based on the Zen 2 architecture in the first half of 2019. Because other TSMC customers have cut back on their expected sales, AMD is now free to increase its planned production of Zen 2 chips.
An increase in planned production would still depend on how much demand there is for these chips, too, but going by what we know so far about these chips, AMD could see a significant increase in sales for Zen 2 chips compared to the Zen 1-based chips. The 7nm Zen 2 chips are expected to be much more competitive in performance compared to Intel’s chips.
TSMC is expected to provide an outlook update to its investors in mid-January. The company previously disclosed that it was set to tape out over 50 chip designs with its 7nm process technology and over 100 chip designs in total with both of its 7nm and 7nm EUV nodes by the end of 2019. TSMC expects 7nm wafer revenues to exceed 20 percent of its total revenues in 2019.