Taiwan Semiconductor Manufacturing Co. (TSMC), the world's leading contract chipmaker, reported its highest sales in seven months for August 2023, attributing the increase to robust demand for its advanced 3 nanometer (3nm) process. The firm posted consolidated sales of NT$188.69 billion ($5.90 billion), a 6.2% rise from July, but a 13.5% decline year-over-year.
The company has seen a two-month rising streak in sales, driven by the popularity of AI applications and strong shipments of chips made on its 3nm process, which commenced commercial production at the end of 2022 in Taiwan. TSMC expects this surge in demand for the 3nm process to counterbalance the impact of global IC inventory adjustments, projecting third-quarter sales to range between $16.7 billion and $17.5 billion.
Despite this positive outlook, TSMC anticipates inventory adjustments in the global semiconductor industry to persist into Q4 2023 due to weak demand from end-users and slower-than-expected recovery of the global and Chinese economies. As a result, TSMC's sales for 2023 could decrease by 10% year-over-year in U.S. dollar terms.
On Thursday, September 07, Mark Liu, chairman of TSMC, acknowledged that the ongoing shortage of compute GPUs for artificial intelligence (AI) and high-performance computing (HPC) applications is due to constraints in its chip-on-wafer-on-substrate (CoWoS) packaging capacity. This shortage is expected to continue for around 18 months due to increasing demand for generative AI applications and relatively slow expansion of CoWoS capacity at TSMC.
Liu revealed that demand for CoWoS surged unexpectedly earlier this year, tripling year-over-year and leading to the current supply constraints. The company expects its CoWoS capacity to double by the end of 2024.
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