Foundry: The price war is fierce, TSMC cuts prices by 5%-10%

Throughout 2023, mature processes will be trapped in price wars. Since March, news has spread that wafer foundries will launch a price war in mature processes. By November, it has been reported that benchmark manufacturers such as UMC, Advanced Micro Devices, and Power Semiconductor Manufacturing Co., Ltd. have slashed their quotations for the first quarter of 2024 by as much as two percent. In terms of digit percentage, it is rumored that TSMC will cut prices by 5% to 10% for 7nm, and Samsung will also cut prices by 5% to 15% to grab orders. Manufacturers may no longer keep prices.

By the end of 2023, mature processes will experience a battle to defend the 60% capacity utilization rate: UMC expects a 6% month-on-month decline in 23Q4 to 60%; SMIC’s 23Q3 utilization rate will fall 1.2% month-on-month to 77.1%; Huahong’s 23Q3 capacity utilization rate is 86.8% , it is expected that it may rebound in 23Q4; the world’s advanced utilization rate in 23Q3 is 60-65%, and it is expected to further decline to 55-60% in 23Q4.

TSMC: Revenue decreased by 4.5% from the previous year

TSMC’s revenue in the fourth quarter (cumulative October to December) was approximately NT$625.529 billion, and its overall revenue in 2023 was approximately NT$2,161.736 billion, a 4.5% decrease from 2022. TSMC said that its performance in 2024 is expected to return to the growth track, with revenue likely to reach 2.5 trillion yuan, an annual increase of more than 15%. Full-year US dollar revenue is expected to exceed US$80 billion for the first time.