1. TSMC Cuts ✂️ Orders after Clients Drop Orders 🔻
Over the last few months, numerous TSMC customers have been canceling orders. TSMC has accepted these canceled orders for a fee or renegotiation on contract deals. Now, TSMC is cutting its orders with lithography tool manufacturer ASML Holding. TSMC specifically dropped orders on EUV equipment, leaving many market experts wondering if it is on track to slash similar orders by over 40% or delay shipments. TSMC is one of ASML’s largest clients, leaving many concerned over the coming months.
The last few months have been rough for several OCMs across the semiconductor supply chain. More specifically, memory chipmakers have been taking the worst of the overall decline in demand. Ongoing inventory correction at Apple, AMD, MediaTek, and other TSMC clients have impacted TSMC’s March sales. Many of these top clients for TSMC have initiated order cuts to prevent further excess inventory from building up. Apple and Intel cut their overall processor orders with TSMC.
2. Samsung prepares for production cuts ✂️
For the first time since the global financial crisis in 2008, Samsung Electronics will see its lowest profit in the last 14 years. The downturn results from the current demand slump significantly impacting the global semiconductor industry, especially the memory market. Samsung Electronics is expected to lose $2.7 billion from consumer demand slumps affecting DRAM and NAND flash prices. Samsung must continue cutting production to offset the losses and quickly correct the supply-demand mismatch.
3. Automotive Chip Supply Stabilizes
Slowly but surely, the automotive chip shortage is improving. original component manufacturers (OCMs) made room for IT product components, putting automotive chip capacity on the back burner.
While silicon-based power components and MCUs are still in tight supply, power management IC (PMIC), CMOS image sensors (CIS), eMMC, and display driver IC (DDI/TDDI) are beginning to return to normal.
This news comes after Tawain IC design houses announced a growing number of short lead time orders thanks to the successful mitigation and deference of automotive orders. Recently, IGBTs became more available from similar actions to aid in easing their shortage.
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