According to Taiwan media reports, the recent TSMC capacity utilization rate slowly rebounded, TSMC customers have significantly increased the amount of film, some market demand is picking up, the semiconductor industry seems to have bottomed out. However, some wafer foundries remain cautious in assessing the industry's prospects.

TSMC's capacity utilization rate rebounded

According to media reports, TSMC's capacity utilization rate slowly rebounded, 7/6nm had collapsed to 40%, has now returned to about 60%, and has the opportunity to climb to 70% by the end of the year, while 5/4nm is also in 75-80%, and the 3nm production capacity is increased quarter by quarter, and is about 80%.

At the same time, TSMC customers have seen a significant increase in film production. Including Apple, Mediatek, Nvidia, AMD, Intel, Broadcom, Marvell and ST have confirmed orders. In addition, AI chip customers such as AMD's Xilinx, Amazon, Cisco, Google, Microsoft, Tesla, etc., have accepted TSMC's plan to raise prices again in 2024.

Tesla, for example, will build a supercomputer room in Austin to scale up Dojo's computing power in order to accelerate the development of autonomous driving systems. The Dojo's core D1 is based on TSMC's 7nm process and advanced packaging technology. Based on this, Tesla is also deepening cooperation with TSMC, and the amount of film is expected to increase from about 5,000 pieces this year to 10,000 pieces next year.

The tide of AI continues to roll, and Nvidia is also actively seeking production capacity recently. On October 19, Nvidia CEO Huang Renxun revealed in an interview that the global AI chip market demand is still very strong, and he has met with TSMC President Wei Zhejia to discuss providing more capacity supply to serve customers. Nvidia is planning the next generation of chips for applications such as AI infrastructure, and this time also met with partners such as Quanta and Asus to discuss cooperation strategies.

Semiconductor boom bottoming out?

At the recent TSMC third quarter law meeting, Wei Zhe Jia pointed out that in addition to the continued strong demand for AI, demand for smartphones and personal computers has also rebounded, and as for automotive electronics to benefit from the continued development of electric vehicles, demand will be quite strong next year. As for when the semiconductor boom will bottom out? 'We see some early signs in PCS and mobile phones, but whether we see the bottom can be said to be very close, very close, but it is still difficult to say whether there will be a strong recovery, because customers are still carefully managing inventory,' Mr. Wei said in response.

In addition, in response to the industry's concern about the growth rate of mobile phones, TSMC Chief Financial Officer Huang Renzhao responded that it is expected that the growth rate of mobile phones will still be lower than the company's future growth rate, and high-speed computing (HPC) will still be the strongest growth and growth contribution in the following years.

In terms of other wafer foundries, LPC also made an outlook for the fourth quarter and future industrial development. Recently, Xie Zai Ju, general manager of LDC, pointed out that the supply chain inventory seems to have fallen to a reasonable level, the demand for mobile phone panel driver ics, monitoring system CIS chips has increased, the visibility has exceeded 1 quarter, and the unit price of special memory products has seen a rebound trend. Power management ics (PMIC) demand is also showing signs of recovery, but the trend is not as clear as driver ics and CIS chips.

As for UMC, the company will hold a corporate briefing on the 25th of this month. Earlier, UMC said at the last quarter meeting that the wafer demand outlook was not clear due to the continuous adjustment of supply chain inventory. Although the industry saw a glimmer of recovery in the second quarter, the overall end-market atmosphere remains weak and customers will maintain tight inventory management.