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I certainly hope you're right. Keep in mind: TSMC is entrenched in a lot of markets characterized by short lead times (say, < 1 month), and a 10% drop is a lot
by cs702 3y ago
I certainly hope you're right. Keep in mind: TSMC is entrenched in a lot of markets characterized by short lead times (say, < 1 month), and a 10% drop is a lot more than anyone -- including the company -- was expecting. Sometime ago I recall seeing charts showing that changes in TSMC's annual revenues are highly correlated with measures of global economic activity such as changes in Apple's global revenues and changes in global GDP.
- bbatsell 3y agoCould you elaborate on what you’re referring to? I’m certainly not an expert, but my understanding was that the vast, vast majority of TSMC’s revenue comes from production of completely custom wafers on newer nodes, and I’m hard pressed to think of something in the industry with _longer_ lead times.
- cs702 3y agoI was referring to lead time on orders for existing products, i.e., those for which TSMC already has manufacturing capacity online, like current iPhone chips. I wasn't referring to the time it takes to go from design to manufacturing!
- panarky 3y agoIn addition to the bullwhip effect, and the unwinding of stockpiling, there's probably some real reduction of demand, and that's probably mostly from China's failure to bounce back to pre-covid GDP.
- ajb 3y agoDuring the shortage lead time for many semiconductor products went through the roof, so it would make sense that there has been at least some stockpiling. Probably you're right that that doesn't affect top tier products which are the bulk of the revenue, because those are the ones that got preferential access to fab capacity. Whether the stockpiling affected a big enough fraction of revenue to cause this effect is not something I have access to the data to know, so like you I am merely hoping that this is the explanation.