Recently, TSMC released its financial report for March 2023, showing revenue of NT $145.408 billion, lower than the previous month's NT $163.174 billion, a decrease of 10.9% compared to the same period last year's NT $171.967 billion, a year-on-year decrease of 15.4%. The last time TSMC's monthly revenue experienced a year-on-year decline was in May 2019, and this time it was another 45 months since then.
Obviously, the decline in market demand and high channel inventory faced by the semiconductor industry in the past few months have affected TSMC. The performance in the first quarter of 2023 is likely to be lower than expected, which has also forced TSMC to start revising its operational blueprint. According to Digitimes, the semiconductor supply chain has heard that TSMC's capacity expansion plans in Kaohsiung, Nanke, Zhongke, Zhuke and other regions in Taiwan, China, China will all slow down, and the capacity will also be reallocated.
TSMC accounts for more than half of its 7nm and below production capacity, and its Kaohsiung plant's 7nm plan has been postponed. The market reports that the 28nm plan will also be postponed, and all construction projects will be slowed down comprehensively. The production time will be extended to after 2026, and the scale of advanced packaging and testing production capacity will also be reduced. However, TSMC's new factories located in Arizona, USA and Kumamoto, Japan will continue to advance, as the former has encountered many problems due to low efficiency and may be delayed.
TSMC's new strategy is likely to impact the global equipment and material supply chain, but under the dual pressure of demand and inflation, this strategy can reduce the cost of construction and equipment depreciation, while also greatly reducing the situation of idle production capacity. In contrast, severely impacted storage companies have already started to reduce production, with SK Hynix, Armor, and Micron cutting back last year. Even companies of the same size as Samsung, after holding on for several months, are finally unable to sustain themselves.
Although the industry generally predicts that demand will rise in 2024, it is difficult for TSMC to return to the COVID-19 period in terms of average capacity utilization. Previously, TSMC had also traveled to Germany to select a site for its factory, but due to the economic downturn and the need to discuss multiple subsidy conditions, the schedule is highly likely to be postponed, and there is currently no further progress in negotiations with Singapore.
