AMD, Apple and Nvidia want to purchase fewer chips from TSMC

By admin On Jul 1, 2022

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AMD, Apple and Nvidia want TSMC to make fewer chips for them, DigiTimes reports based on its own sources. AMD and Apple are actually going to get fewer chips from TSMC, but TSMC wouldn’t want to do this for Nvidia.

Demand for consumer products such as smartphones and PC components has fallen faster than expected in recent months, say the DigiTimes sources. Therefore, manufacturers now have too much stock and the prices of these products are falling. To counteract the fall in prices, manufacturers have asked TSMC to make fewer chips.

For example, Apple initially planned to make a first batch of 90 million iPhone 14 smartphones, but the company has since reduced this by ten percent. Apple has therefore asked TSMC to make fewer chips.

AMD has asked the chip maker to make 20,000 fewer 6nm and 7nm wafers in the last quarter of this year and the first quarter of next year. These chips are used in processors and GPUs from the manufacturer. AMD has not reduced orders for 5nm chips, according to the sources.

Nvidia would also have asked TSMC to supply fewer chips, but TSMC did not want this, according to the sources. Nvidia paid TSMC extra to be able to be assured of capacity, after it previously had chips made by Samsung. However, now Nvidia still has too many current-generation GPUs in stock and second-hand mining video cards are sold because it is less profitable to mine cryptocurrencies.

It concerns an order for 5nm chips for the RTX40 series GPUs, which Nvidia wanted to reduce. TSMC does not want to do this, according to DigiTimes, but instead proposes to postpone production by a quarter or two, until the first quarter of next year. In addition, Nvidia is responsible for looking for another customer who can use the freed up production capacity of TSMC.

Despite the reduced demand from the three companies, TSMC remains positive, according to DigiTimes sources. Demand from the automotive and supercomputing sectors remains strong; in some cases, the demand exceeds what TSMC can produce.