TSMC Q3 2022 Revenue Hits All-Time High Despite Slowing Demand:
Revenue for Taiwan Semiconductor Manufacturing Co. (TSMC) topped analysts' estimates in the third quarter and reached $19.4 billion. On Friday, the company reported that earnings in Q3 2022 were 48% higher compared to the same quarter a year ago.
TSMC revenue in July (NT$186.76 billion), August (NT$218.13 billion), and September (NT$208.25 billion) totaled NT$613.14 billion ($19.382 billion), which is about 48% higher than in Q3 2021, according to a Bloomberg report. TSMC's results run contrary to other semiconductor companies. Just yesterday, AMD warned of a $1.1 billion revenue shortfall, whereas Kioxia decided to reduce the output of 3D NAND wafers last week.
There are several reasons why TSMC's results are improving while sales of its partners' products are dropping due to rising inflation and geopolitical tensions. First up, TSMC has managed to increase its market share in recent years, particularly when it comes to leading-edge nodes. Secondly, since the company leads other contract makers of chips, it can increase prices, which drives its revenue upwards.
The third quarter of 2022 was particularly good for TSMC as the contract maker of chips ramped up production of multiple high-profile products from its top customers. In particular, TSMC ramped up production of AMD's latest Zen 4-based processors for desktops and servers and presumably started making the company's next-generation GPUs featuring the RDNA 3 architecture. Also, the foundry increased production of Apple's M2 system-on-chips for PCs as well as A15 Bionic and A16 Bionic SoCs for smartphones. Finally, TSMC started making Nvidia's Ada Lovelace graphics processors, and Hopper GH100 compute GPUs. All of these products use leading-edge nodes (N4, N5, 4N, etc.) that are pretty expensive, which explains how TSMC managed to boost its earnings while demand for consumer chips is getting lower.
(Score: 3, Interesting) by looorg on Tuesday October 11 2022, @10:50AM (1 child)
As far as I know it's mainly ONE reason. TSMC is the only one still standing that does what they do, all the competition have fallen by the road and couldn't keep up anymore. If you want to use the latest and greatest they are pretty much your only choice. No choice, no options and welcome to monopoly. The previous competition are still using older tech and methods.
It's unlikely that their products will spoil either so they'll sell eventually. The main risk would be that the consumer demand would be low for a long time and a new generation of chips would come along and overtake their stock. But that is unlikely to happen.
(Score: 3, Informative) by takyon on Tuesday October 11 2022, @01:46PM
Samsung moved to gate-all-around transistors (GAAFET) a node before TSMC. TSMC is using the older FinFET tech, just more effectively.
Samsung can provide some semblance of competition to TSMC and even overtake them if TSMC stumbles. They were the supplier for Nvidia's consumer Ampere GPUs and plenty of other chips about (but not quite) as good as what TSMC can make. Intel Foundry Services is another story, but the U.S. government will infuse it with infinite money (starting with the CHIPS Act) if China takes Taiwan.
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