Chip shortage may be coming to an end, TSMC is still king

nanoguy

Posts: 1,233   +24
Staff member
In brief: The chip boom of the past two years that spurred a global shortage is coming to an end, and that shouldn't surprise anyone. Chipmakers, consumer tech companies, and retailers are expecting rockier months ahead, but consumers can finally hope for good availability and pricing on both current-gen and next-gen products.

This year, the smartphone market experienced one of its worst first quarters of the past several years. Global shipments fell more than 11 percent compared to 2021, and the European market saw its most significant decline in a decade.

Some of that decline was expected due to seasonality, so phone makers like Samsung started reducing their production accordingly. That said, market analysts at Counterpoint estimate that mobile chipset revenues grew around 23 percent in the first three months of 2022 thanks to a shift in consumer demand toward more expensive 5G handsets.

TSMC took the lion's share of contract manufacturing for these chipsets — an estimated 70 percent of SoCs and cellular modems were made using the Taiwanese company's latest process nodes (7nm, 6nm, 5nm, and 4nm). Samsung took most of the remaining chip orders and is currently looking to woo more customers with its cutting-edge 3nm process node, which is the first to use gate-all-around field-effect transistors.

When zooming in on TSMC, analysts found that chipset sales had declined nine percent year-over-year for the three months ending in March. That situation is expected to change in the coming months as Qualcomm will shift more of its chip orders to TSMC instead of Samsung. Notably, this decision was made after the Korean giant experienced yield problems on its 4nm process node.

Despite those issues, Samsung holds a strong position when it comes to 5nm and 4nm nodes. The company went from shipping less than nine percent of all advanced mobile chips in Q1 2021 to no less than 60 percent in the first quarter of this year.

Overall, consumer demand for smartphones is expected to drop in the coming months due to inflation and growing fears of an imminent global recession. That said, there are signs the tech supply chain may finally be healing after suffering several shocks over the past two years.

A TrendForce report suggests the chip shortage as we know it may be coming to an end sooner than previously expected. Foundries have seen a wave of order cancellations that will result in capacity being underutilized towards the end of this year.

Wafer Size Process node Target products H2 2022 Capacity Utilization
200mm 0.35 -- 0.11μm Display Driver ICs, PMICs, Contact Image Sensors 90-95%
300mm 90/55nm Microcontrollers, PMICs, TDDI, Wi-Fi 90-99%

300mm

40/28nm AMOLED Display Driver ICs, Wi-Fi, 4G modems, TV SoCs, Platform Controller Hubs 90-99%
300mm 1Xnm 4G/5G modems, FPGAs, ASICs, Wi-Fi, TV SoCs, Platform Controller Hubs 95-100%
300mm 7nm -- 4nm CPUs, GPUs, ASICs, mobile SoCs, FPGAs, AI Accelerators 95-100%

The first of these revisions is for 200mm and 300mm wafers made using mature process nodes like 12 nm and beyond. This means that manufacturers no longer have problems sourcing PMICs, microcontrollers, display driver ICs, and other much-needed components. Analysts believe some foundries will have problems maintaining production capacity at 90 percent, especially as manufacturers are starting to deal with a buildup in inventory.

More advanced chip fabrication lines may still see anywhere between 95 percent to full utilization rates. That means companies that design CPUs, GPUs, ASICs, 5G modems, and mobile chipsets don't see any reason to make fewer of them just yet. At the same time, foundries aren't willing to give up orders and will, at best, offer delays in shipments of up to three months.

For gamers who are waiting for new CPUs and GPUs from Intel, Nvidia, and AMD, this is definitely good news as it means availability won't be a major issue. Add to that a flood of used GPUs on the second-hand market and waning demand for PC motherboards, and we have the right conditions for more affordable system upgrades.

Permalink to story.

 

psycros

Posts: 4,247   +6,070
This will be good for supply this year, buy I worry the new fabs that have been announced will be cancelled.

I wouldn't be too concerned. All the new facilities will use the latest processes so they'll be geared more towards supporting the high-end chips that are in greater demand. The only problem would be construction delays which might result in designs needing to be updated to account for whatever the next big thing is.
 

kiwigraeme

Posts: 1,123   +822
This will be good for supply this year, buy I worry the new fabs that have been announced will be cancelled.

I wouldn't worry too much - some of these facilities seem political /strategic .

We definitely need some Fabs outside of Taiwan - given earthquakes /Tsunamis/China etc
Even when I saw all the Fab announcements - I was wondering about demand - it needs to come from new tech. PCs good enough , phones good enough - after awhile PS5 and XB1 will saturate ( here's hoping for a super PS5 pro - when I upgrade from PS4)

The other thing is midrange phones , GPU , CPUs etc will be excellent products in a few years -- ie beating current Flagships ( excepting silly 4090 TI super Pro 1500W crap ) .
Who updates microwave , what MAC home user needs to update ?
I'm really curious when lots of devices will plateau - to commodity status - I think most phones for average user are there . I see nothing on new phones I really need .
The average PC user needs nothing more at moment - that can't be resolved with Cloud
You can see why the Server market is fiercely sort after - as that will keep growing
 

Thatsdisgusting

Posts: 21   +23
And you still have to wait in line forever to get your hands on PS5 for “just” 800-1000$, lol.

And that’s too much for a couple of exclusives, if you ask me…
 

flee2020

Posts: 31   +27
The correction has begun - it is good that we are getting to some supply and demand equilibrium now and soon, supply may exceed demand. In the tech industry we often see such cycles in the memory and storage markets.

It is good to see declining motherboard demand - prices of the Intel 600 series chipset motherboards became ridiculous and I hope that the 700 series motherboard prices will be lower.

The GPU bubble burst spectacularly and it is time that those profiteers took the pain of a collapsing market. They had it good and now, its payback time!
 

godrilla

Posts: 450   +216
Hopefully the chip shortage recovery trickles down to the automobile industry soon because they are still suffering.
Also its said that Nvidia are lowering orders of next gen gpus to deplete the current gen inventory, but are they lowering the production of current gen as well?
As far as DIY pc market I predicted that this black Friday it would make a recovery. There will be a price war between used second hand market and retail market attempting to get rid of inventory for next gen.
 

Mr Majestyk

Posts: 1,266   +1,149
Looks like TSMC egregious price gouging might have to come to an end. With demand collapsing as fast as the global economy, their unrelenting price rises will be met with more cancellations.

Any way saying the chip shortage is coming to an end because demand has plummeted it spurious at best.
 

Diabolik707

Posts: 15   +10
US demand will keep dropping as American's suffer through the Biden ineptocracy!

Nvm that the inflation began in early 2021 during Trump's administration and that he was the one to give away TRILLIONS to rich corporations and wall street as corporate welfare to prop up the stock market then TRILLIONS more to the same people for "pandemic help" way before a single penny of help was seen by the poorest among you.

Don't you think the pandemic and this "quantitative easing" had their role to play in the current inflation and recession?

How shortsighted and ignorant can US citizens ( which I am not and I'm not in the US either ) act exactly about their how economic history? Or is it simply the usual rewriting of history by the pleb in the name of the divisive partisan distraction of the 2 corporate party system to keep the pleb in line having most of you under their spell while they laugh all the way to the bank with 50 years record profits and upward wealth redistribution not seen in a 100 years since the robber barons?

Jesus US citizens, you have no idea how you look and sound to people outside looking in.
 

toddincabo

Posts: 9   +34
Nvm that the inflation began in early 2021 during Trump's administration and that he was the one to give away TRILLIONS to rich corporations and wall street as corporate welfare to prop up the stock market then TRILLIONS more to the same people for "pandemic help" way before a single penny of help was seen by the poorest among you.

Don't you think the pandemic and this "quantitative easing" had their role to play in the current inflation and recession?

Jesus US citizens, you have no idea how you look and sound to people outside looking in.

I am an American living in Mexico and agree 100%. People ask me what has happened to America and all I have to do is point to the Republicans......tax breaks for the filthy rich and a Supreme court from Hell.
 

Ludak021

Posts: 708   +531
Chip shortage due to overproduction. nVidia tries to cancel slots, stores are full of new overpriced stock that they cannot move due to oversupply and lack of sheep...I am in tears.
3080, used for mining or otherwise, for $<300 by January 2023 anyone? :D
 

nanoguy

Posts: 1,233   +24
Staff member
Chip shortage due to overproduction. nVidia tries to cancel slots, stores are full of new overpriced stock that they cannot move due to oversupply and lack of sheep...I am in tears.
3080, used for mining or otherwise, for $<300 by January 2023 anyone? :D
Personally, I want an RX 6800 XT or RX 6900 XT at $300-$350. January is likely too early for such a sharp drop, but there's a good chance you'll be able to find reasonably priced RTX 30 series cards this time next year.
 

Ludak021

Posts: 708   +531
Well, you can get 3090 for ~$800 from ebay now.
edit: I am referring to used cards. I am buying used only anyway...
 
Nvm that the inflation began in early 2021 during Trump's administration and that he was the one to give away TRILLIONS to rich corporations and wall street as corporate welfare to prop up the stock market then TRILLIONS more to the same people for "pandemic help" way before a single penny of help was seen by the poorest among you.

Don't you think the pandemic and this "quantitative easing" had their role to play in the current inflation and recession?

How shortsighted and ignorant can US citizens ( which I am not and I'm not in the US either ) act exactly about their how economic history? Or is it simply the usual rewriting of history by the pleb in the name of the divisive partisan distraction of the 2 corporate party system to keep the pleb in line having most of you under their spell while they laugh all the way to the bank with 50 years record profits and upward wealth redistribution not seen in a 100 years since the robber barons?

Jesus US citizens, you have no idea how you look and sound to people outside looking in.
Ummmm...you realize you're judging hundreds of millions of people, many who don't agree with that poster. You're essentially doing what you're railing against... misjudging a situation, and stereotyping individuals' beliefs, based on an incomplete picture.

Also, both things can be true. They're not mutually exclusive.

Chip shortage as a result of multiple factors: massive layoffs, faster than expected recovery, demand - supply mismatch, labor shortages causing a bottleneck. A flood of money from countries around the world trying to prevent another great depression. And bad leadership by Biden. And Trump. And others.