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This makes absolutely no sense. A month ago the headline was "Apple buys every 3 nm chip that TSMC can make for next-gen iPhones and Macs" [1]. Six months ago

by lisper 3y ago

This makes absolutely no sense. A month ago the headline was "Apple buys every 3 nm chip that TSMC can make for next-gen iPhones and Macs" [1]. Six months ago it was a global chip shortage that had supply chains backed up around the planet. And now it's suddenly "the world's top contract chipmaker grows increasingly nervous about customer demand"? In the middle of a revolution in AI? Something doesn't add up here. https://arstechnica.com/gadgets/2023/08/report-apple-is-saving-billions-on-chips-thanks-to-unique-deal-with-tsmc/ https://arstechnica.com/gadgets/2023/08/report-apple-is-savi...

ksec 3y ago
>as the world's top contract chipmaker grows increasingly nervous about customer demand, two sources familiar with the matter said. I stopped reading after that. And as someone who knew about TSMC and ASML before 99.99999% of internet even start reporting news on TSMC. Most if not all of TSMC news are just plain BS.
MrBuddyCasino 3y ago
Nvidia‘s H100 chips may sell for a lot of money, but in terms of wafers, its just around 10% of volume compared to their gaming chips. There is rarely a shortage that isn’t followed by an oversupply, so in fact it would be weird if it was different this time.
SeanAnderson 3y ago
https://en.wikipedia.org/wiki/Bullwhip_effect https://en.wikipedia.org/wiki/Bullwhip_effect My naïve assumption is that it has to do with this?
- hef19898 3y ago
  That one knows no mercy.
chankstein38 3y ago
I'm equally confused. I came here to say the same. One thing I'm not confident about is my understanding of this article. Is it, in fact, saying that they're slowing down production because they fear low consumer demand? I may have missed it in the article but I don't feel like it ever clearly states it like that. Def possible I just didn't read it well but I ended my review of it still confused about whether they were worried about lack of or increase in demand
solardev 3y ago
It's a typical boom/bust cycle, isn't it? Plus tech is going through a recession, there's less money tossed around, inflation is cray cray, people have less disposable income, etc.
ThrowawayR2 3y ago
The chip shortage was about common, low-cost chips made on older (i.e. larger), mature process nodes that TSMC does less business in. As for the "revolution in AI", TSMC isn't going to spontaneously manufacture chips that nVidia and AMD haven't ordered, so your "something doesn't add up" should be directed to them. The same goes for Apple.
GeekyBear 3y ago
I would imagine it has to do with the industry wide slump in demand that appeared earlier in the year. > Samsung Electronics plans to cut back memory chip production as its operating profit in the first quarter of 2023 is expected to plummet about 96% from the previous year. The global macroeconomic slowdown, memory chip oversupply and sluggish demand have hurt its profit, the world’s largest memory chip maker said in its preliminary earnings release on Friday. https://techcrunch.com/2023/04/06/samsung-cuts-memory-chip-production-as-it-hits-worst-quarterly-profit-since-2009/ https://techcrunch.com/2023/04/06/samsung-cuts-memory-chip-p... I think it took Samsung most of a year of production cuts to clear out excess inventory.
ckastner 3y ago
> Six months ago it was a global chip shortage that had supply chains backed up around the planet. chip != chip. TSMC manufactures hundreds of products, check out slide 4 of the last quarterly results [1]. "AI" (on 5nm or below) is currently only a smaller share of total capacity. 7nm was only around 50% utilization, compared to 110% a year ago. The recent chip shortage was mostly from 28nm or above. Think automotive, and the like. The inventory correction happening now is from a strong reduction in smartphone business, and HPC is also down thanks to PC sales declining 10-15% this year. And there is nothing surprising about this, TSMC has been guiding this inventory correction for more than a year now. [1] https://investor.tsmc.com/english/encrypt/files/encrypt_file/reports/2023-07/aa7d1adbe692cf07f10aa1584c832facb43ee84b/2Q23Presentation%28E%29.pdf https://investor.tsmc.com/english/encrypt/files/encrypt_file...
- addaon 3y ago
  > The recent chip shortage was mostly from 28nm or above. As a reminder to others, 28 nm was the last planar process; there's a discontinuity in cost moving below 28 nm to FinFET processes. For applications which don't need the last bit of density of power efficiency, 28 nm is likely to stay a sweet spot for a long, long time to come.
  - ls612 3y ago
    With 3nm being the last of the FinFETS will it end up in a similar situation in a decade? Will it be used for a lot of applications like 28nm is now for a long time?
    - addaon 3y ago
      It comes down to what the cost delta ends up being between FinFETs and GAAFETs, and if that's where the discontinuity is. I suspect that, even though EUV is "solved" now, the solutions are so expensive and sketchy that the DUV/EUV break is more likely to be important, with the final DUV processes being very long-lived. Unclear where this will end up exactly; I'd expect to see mature 7 nm DUV processes, but it's possible that the economics will either favor maturation of DUV + one or two EUV layers, or that a pure DUV 10 nm process with less multi-patterning ends up maturing so much cheaper that that wins out.
trynumber9 3y ago
Apple buying every N3B wafer isn't enough to match the orders they placed. They had originally anticipated other customers on N3B too. But only Apple has an N3B design ready for manufacture. Intel - the only other major N3B customer - plans to use it for Arrow Lake S which is a late 2024 product. Every other major customer decided to wait for N3E because N3B is too expensive. TSMC therefore wants to push out the acquisition of additional machines until next year when N3E is ready. It's also the reason TSMC pulled in N3E a quarter or two.
xster 3y ago
The article just obfuscates the news and hides a key detail at the end. China is a huge market for everything TSMC makes. China just showed this month that they can manufacture a near current generation flagship SoC using 90%+ domestic supply chains. This makes a big revision on future outlooks in China and ripples through demand forecast and capacity planning.
- mrtksn 3y ago
  >China just showed this month that they can manufacture a near current generation flagship SoC using 90%+ domestic supply chains I missed the news, any links on the subject?
  - cc-color 3y ago
    https://www.youtube.com/watch?v=-KrdcTsScKk https://www.youtube.com/watch?v=-KrdcTsScKk
    - mrtksn 3y ago
      thanks
- sbrother 3y ago
  Does this mean that China is buying a bunch of ASML EUV machines?
  - karmicthreat 3y ago
    China won't be able to unless they develop the tech domestically.
    - sbrother 3y ago
      Right that's what I thought, so how are they building a "near current generation flagship SoC"?
tester756 3y ago
>In the middle of a revolution in AI? Something doesn't add up here. Middle? hasn't the hype died already?
oneTbrain23 3y ago
Recession kicks in. Huawei able to do 7nm...but the bulk of chip sales are at 14nm+. China in 2022 end has successfully dominated that market near 80%. The pre-order for Huawei mate 60 already reaching 10m+ just a week ago and projected to reach 60m by 2024 end. Meanwhile China pretty much banned iPhone "subtlely" by forbiding their government servants using that (which can translate to around 100m people if you read between the line meaning ccp members). The euphoric news sensations are mostly CIA Uncle Sam propaganda. If you go into labor market or ask any HR the picture aren't as rosy as what you read on the media. Also, I have very reliable source China already at 3nm just yield is very low for mass market production. They should be able to reach that around Dec 2024 though TSMC probably will announce their 2nm. So 2025 is when China on par with TSMC making the war inevitable around 2026 as many fengshui masters calculated large chaotic event in that year.
- hunters_laptop 3y ago
  LOL you get voted down because mentioning those 3 words of american 'security organisations'
halJordan 3y ago
I know you've already been clobbered with responses, but i would like to point out how shit Ars has gotten to have messed you up like this. The enshittification of Ars is the thing that "doesnt add up for you."
- lisper 3y ago
  It was Reuters, not Ars, but your point is well taken nonetheless.

by lisper 3y ago

ksec 3y ago

>as the world's top contract chipmaker grows increasingly nervous about customer demand, two sources familiar with the matter said. I stopped reading after that. And as someone who knew about TSMC and ASML before 99.99999% of internet even start reporting news on TSMC. Most if not all of TSMC news are just plain BS.

MrBuddyCasino 3y ago

Nvidia‘s H100 chips may sell for a lot of money, but in terms of wafers, its just around 10% of volume compared to their gaming chips. There is rarely a shortage that isn’t followed by an oversupply, so in fact it would be weird if it was different this time.

SeanAnderson 3y ago

https://en.wikipedia.org/wiki/Bullwhip_effect https://en.wikipedia.org/wiki/Bullwhip_effect My naïve assumption is that it has to do with this?

hef19898 3y ago
That one knows no mercy.

chankstein38 3y ago

I'm equally confused. I came here to say the same. One thing I'm not confident about is my understanding of this article. Is it, in fact, saying that they're slowing down production because they fear low consumer demand? I may have missed it in the article but I don't feel like it ever clearly states it like that. Def possible I just didn't read it well but I ended my review of it still confused about whether they were worried about lack of or increase in demand

solardev 3y ago

It's a typical boom/bust cycle, isn't it? Plus tech is going through a recession, there's less money tossed around, inflation is cray cray, people have less disposable income, etc.

ThrowawayR2 3y ago

The chip shortage was about common, low-cost chips made on older (i.e. larger), mature process nodes that TSMC does less business in. As for the "revolution in AI", TSMC isn't going to spontaneously manufacture chips that nVidia and AMD haven't ordered, so your "something doesn't add up" should be directed to them. The same goes for Apple.

GeekyBear 3y ago

I would imagine it has to do with the industry wide slump in demand that appeared earlier in the year. > Samsung Electronics plans to cut back memory chip production as its operating profit in the first quarter of 2023 is expected to plummet about 96% from the previous year. The global macroeconomic slowdown, memory chip oversupply and sluggish demand have hurt its profit, the world’s largest memory chip maker said in its preliminary earnings release on Friday. https://techcrunch.com/2023/04/06/samsung-cuts-memory-chip-production-as-it-hits-worst-quarterly-profit-since-2009/ https://techcrunch.com/2023/04/06/samsung-cuts-memory-chip-p... I think it took Samsung most of a year of production cuts to clear out excess inventory.

ckastner 3y ago

> Six months ago it was a global chip shortage that had supply chains backed up around the planet. chip != chip. TSMC manufactures hundreds of products, check out slide 4 of the last quarterly results [1]. "AI" (on 5nm or below) is currently only a smaller share of total capacity. 7nm was only around 50% utilization, compared to 110% a year ago. The recent chip shortage was mostly from 28nm or above. Think automotive, and the like. The inventory correction happening now is from a strong reduction in smartphone business, and HPC is also down thanks to PC sales declining 10-15% this year. And there is nothing surprising about this, TSMC has been guiding this inventory correction for more than a year now. [1] https://investor.tsmc.com/english/encrypt/files/encrypt_file/reports/2023-07/aa7d1adbe692cf07f10aa1584c832facb43ee84b/2Q23Presentation%28E%29.pdf https://investor.tsmc.com/english/encrypt/files/encrypt_file...

addaon 3y ago
> The recent chip shortage was mostly from 28nm or above. As a reminder to others, 28 nm was the last planar process; there's a discontinuity in cost moving below 28 nm to FinFET processes. For applications which don't need the last bit of density of power efficiency, 28 nm is likely to stay a sweet spot for a long, long time to come.
- ls612 3y ago
  With 3nm being the last of the FinFETS will it end up in a similar situation in a decade? Will it be used for a lot of applications like 28nm is now for a long time?
  - addaon 3y ago
    It comes down to what the cost delta ends up being between FinFETs and GAAFETs, and if that's where the discontinuity is. I suspect that, even though EUV is "solved" now, the solutions are so expensive and sketchy that the DUV/EUV break is more likely to be important, with the final DUV processes being very long-lived. Unclear where this will end up exactly; I'd expect to see mature 7 nm DUV processes, but it's possible that the economics will either favor maturation of DUV + one or two EUV layers, or that a pure DUV 10 nm process with less multi-patterning ends up maturing so much cheaper that that wins out.

trynumber9 3y ago

Apple buying every N3B wafer isn't enough to match the orders they placed. They had originally anticipated other customers on N3B too. But only Apple has an N3B design ready for manufacture. Intel - the only other major N3B customer - plans to use it for Arrow Lake S which is a late 2024 product. Every other major customer decided to wait for N3E because N3B is too expensive. TSMC therefore wants to push out the acquisition of additional machines until next year when N3E is ready. It's also the reason TSMC pulled in N3E a quarter or two.

xster 3y ago

The article just obfuscates the news and hides a key detail at the end. China is a huge market for everything TSMC makes. China just showed this month that they can manufacture a near current generation flagship SoC using 90%+ domestic supply chains. This makes a big revision on future outlooks in China and ripples through demand forecast and capacity planning.

mrtksn 3y ago
>China just showed this month that they can manufacture a near current generation flagship SoC using 90%+ domestic supply chains I missed the news, any links on the subject?
- cc-color 3y ago
  https://www.youtube.com/watch?v=-KrdcTsScKk https://www.youtube.com/watch?v=-KrdcTsScKk
  - mrtksn 3y ago
    thanks
sbrother 3y ago
Does this mean that China is buying a bunch of ASML EUV machines?
- karmicthreat 3y ago
  China won't be able to unless they develop the tech domestically.
  - sbrother 3y ago
    Right that's what I thought, so how are they building a "near current generation flagship SoC"?

tester756 3y ago

>In the middle of a revolution in AI? Something doesn't add up here. Middle? hasn't the hype died already?

oneTbrain23 3y ago

Recession kicks in. Huawei able to do 7nm...but the bulk of chip sales are at 14nm+. China in 2022 end has successfully dominated that market near 80%. The pre-order for Huawei mate 60 already reaching 10m+ just a week ago and projected to reach 60m by 2024 end. Meanwhile China pretty much banned iPhone "subtlely" by forbiding their government servants using that (which can translate to around 100m people if you read between the line meaning ccp members). The euphoric news sensations are mostly CIA Uncle Sam propaganda. If you go into labor market or ask any HR the picture aren't as rosy as what you read on the media. Also, I have very reliable source China already at 3nm just yield is very low for mass market production. They should be able to reach that around Dec 2024 though TSMC probably will announce their 2nm. So 2025 is when China on par with TSMC making the war inevitable around 2026 as many fengshui masters calculated large chaotic event in that year.

hunters_laptop 3y ago
LOL you get voted down because mentioning those 3 words of american 'security organisations'

halJordan 3y ago

I know you've already been clobbered with responses, but i would like to point out how shit Ars has gotten to have messed you up like this. The enshittification of Ars is the thing that "doesnt add up for you."

lisper 3y ago
It was Reuters, not Ars, but your point is well taken nonetheless.